It's difficult to see that there's much more in this decline before a serious retracement. But it could happen.
The Z-Score which is a measure of volatility on a 25-Day basis is the worst since the 2-year bull market began. The RSI is below 30 - it rarely gets down that far before a significant retracement.
The "Repeating Ranges" shown on the XJO Index chart above (three long down arrows) suggest that the fall could go down to the significant support around the 4570 area.
Before trying to "pick the bottom" - it might be best to look for a reversal candle - one with a very long shadow like we saw in May and July 2010. Either that or a "bullish engulfing" candle, i.e., a big up day that completely engulfs the preceding big down day.
In the meantime, all eyes will be on events later tonight (our time) in Saudi Arabia which could have a profound effect on the oil price.
Just remember, the down trend so far is nothing like the one seen starting in mid-April 2010.
On that note of joy,
Good luck
Red
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