So far just a nice little pullback. As noted by others here, next stop around 1030-38ish in ES. Then after that we watch the S&P trendline. Very unlikely that this first pullback after a long up ride "is the big one" everyone has been anticipating. Likely just a little pullback before resuming, but no one knows for sure until after the fact (well, no one but GS maybe). Use the technicals as a guide and follow FB123's suggestion to look for a clue to when the market may be bottoming out for the time being. There is no need to rush in and buy at the moment. If you were long, i hope you thought about taking some profits on Tuesday or at the open today, and perhaps putting on a hedge or two to protect your long positions. Forget about trying to pick the exact bottom (or top). It can't be done except by blind luck or in hindsight. The best you can do is use technical analysis to improve the odds.
I highly doubt it is the top. I think it is a top, much like the few we have had in the since March. We've already retraced 30 points from the peak yesterday... might have another few to go... but I wouldn't be calling this rally over yet, not by a long shot.
a reversal will come when we get big volatility and a spike bottom on adaily chart with the market closing at above the midpoint and clsoer to the high of the day on extreme volume... narrow range bars never show a top or bottom!!!!!! they show equilibrium
A narrow range bar at the top of an upmove with extremely high volume shows that the pros are selling into the move and capping it. It's a standard VSA signal. What you described is also another VSA signal, but there is more than one way to detect the end of a market move. In any case, what I meant was a low with climactic volume, probably intra-day... followed by a low volume test of that low which succeeds, and then probably a close in the middle part of the day's range or higher... so that's similar to what you said. I have attached a chart with some examples of narrow range bars that capped up and down moves.
Time to buy?! Buy with what?! Where were these people back in Mar Apr May Jun Jul? Why buy at these levels? You sell at these levels!