As we posted over the weekend, our intermediate target for this down leg was 1,570, which occurred at 12:00 noon today. After a 2 or so points retracement upwards, the market continued to move lower, reaching 1,552 at the close, stopping right at the 34 day EMA. The depth of the drop was beyond our predictions, which is often the case in impulsive waves down, as fear governs the market more than numbers.

At this point, the market is oversold on the hourly, but not on the daily chart. Also, the bonds ticked up but not by a lot, leaving the $TNX at 1.702 at the close. For bonds, we expect the old highs to be tested going forward, which is bearish for stocks.

What happens with stocks in the next day or two, will determine market behavior for the next few weeks.