While on the one hand it would seem fairly clear at the moment that a retest of the August low is underway, traders should be open to the possibility that this is a [b] wave, which may or may not actually touch the August low. Even so, shorting the indexes seems like a good probability right now. The gap down open was too large and avoiding going short on the open was the best move.
The indexes broke below last week's low confirming the daily downtrend. A 50% retracement of the recent decline is around 53.85 for the Qs and that is where I will be looking to get short. A greater retracement is possible, but not guaranteed.
The daily MACD remains positive and is an obvious warning to not get greedy with downside targets. An approach to the August low to around 50 for the Qs and 1120 for the SP500 may be the best that can be hoped for. Certainly holding short for much lower lows does not seem prudent. We are entering a period where a more significant low would be likely in the first part of October, so beware. Shorting individual stocks right now doesn't seem like all that good an idea either as many are still greatly oversold.