Mayday Mayday ...

Oops... What did i say yesterday about adrenaline levels... Yes i warned of some drifting down back to 900 for ES and 500 for ER and yes... i admit i again did not anticipate this would happen in a single day.
Volatility is out of this world (check VIX) and while we can still model directions and levels, we have a lot of trouble gauging market acceleration correctly.
Anyway, you probably went short yesterday and enjoyed the ride...

Now what's in store for today?

About EURUSD, the US$ is incredibly resilient at these levels and could start strong again today. That spark is not coming so we'll stay oversold to maybe around 1.327. Going short is now however limited to short time frames.

ER: Oh well, we're back to 500, and we could test lows again. We're obviously not too positive so caution is essential here. Another free fall remains possible with a target as low as 370 if the market doesn't calm down soon.

ES: Same story, we have a support level at current levels, then around last week's lows, then.... another 20% lower. Aaargh...

Let's not panic just now. This is witching day and the market can still bounce today after all (short tick charts give us a stall level). All we know is that there is NO significant mid-term recovery potential right now, and stopping the bloodshed would be good enough until the whole world takes its Prozac and starts smiling again...