Yesterday the market gapped up a significant amount and ran right into the highs from the end of last week at “1”. The market tried to move higher but it stalled at the 11.15 reversal time and traded lower to set a new low for the day during lunch. The market retraced half that distance back to close in the middle of the day’s trading range leaving a Doji on the daily chart sitting right at the prior highs and the SPY was similar although a little weaker as it is not challenging new highs. It’s important to understand the bigger picture in this situation. The QQQ is the most bullish of the daily charts as they sit right now (not including the IWM, the small-cap index, which is actually at new highs as of yesterday) and the intraday picture is bullish with the hourly chart that is perfectly intact to move higher. The daily chart has had a very difficult time in this area and it should be noted that the top of a bullish consolidation will always get multiple tests even if prices are about to drop to prior lows. Confirmation is needed in this situation so today will be the key day for the market. If prices trade above “1” after 10.30 this morning it will likely lead to a new stage II on the daily chart. However under yesterday’s low will likely lead to a test of daily support levels. There is a wide range of support at “2” that could act to hold the market intraday, but closing with a red bar will likely pave the way for a retest of daily support areas. Today will be a critical day for the market.