Correction: how far back do we go?

As last week was molded by some disappointing economic reports which due to the conventional opinion of analysts sent the stock markets downwards today we'll dedicate ourselves to the question how far the correction is going to go and for what period of time the correction in the stock markets is going to last.

The situation: The ES # Weekly 8 Candle GUNNER24 Up has formed its swing top exactly at the diagonal square line (green mark) within the 2nd double arc which offers few resistance. The price landed exactly on the lower line of the double arc and at the Gann Angle which in July already gave its support. The price is in the bullish half of the setup. Conclusion: Possibly, next week the Friday low is going to be tested again, but that one should last. The 3rd double arc continues being our main target for the setup.

As expected, in the NDX Daily GUNNER24 Setup the swing high grew at the 5th double arc. The top formed at the lower horizontal line of the eighth passed square where we can always expect a turn. With the Friday low the price landed on the Gann Angle anchored in the setup which has offered support twice already. On account of the rule that with the Gann Angles the price should show a similar performance like the time before when the Gann Angle was touched we can expect a strong rebound, again...

Well, the price closed within the double arc. Because of that conduct we can assume that a continuation of the trend is going to happen.  

Let's have a look at the situation which is to be seen in all the indexes, as far as the GUNNER24 Down Setup is concerned.

They all landed weakly on the first double arc and shot over it narrowly.

In all the indexes, a 3 Candle GUNNER24 Down Setup has been given. According to our trading rules, in case of a strong trend we can assume that the corrections within the trend end at the 1st or 2nd double arc. That's why in our trading chart above, we have assured our shorts very narrowly because a rebound may start immediately since Monday.

In the 4 hour GUNNER24Up Setup the price normally follows the 4th double arc which offers few resistance.

Here, too, the price closed within the double arc so it should resume the main trend soon, again. But it might follow that 4th double arc until the 10/16. Anyway, because of the strong supports in the higher time frames that should be practically impossible.

Here, you see the targets of that swing where I expect we should turn upwards by Monday/Tuesday. Please pay attention to the rule you should never buy into a downtrend, but rather forecast the probable magnitude of the downtrend and cover shorts, or at the predicted low, wait for a buy signal reversal (candle reversal). Most of all money from trading is made in the middle of a trend and that trend move should have almost reached its end, already.

In our newsletter, we try to point out possible reversals, and then we go with the new trend. But being good traders we always have to wait for the actual reversal and do not go with the new trend before. At this point, we don't expand on the lower time frames, but nothing else shows you when the reversal really took place. The reversal in the 5 minute chart leads to the reversal in the 15 minute chart and then to an hourly and finally a daily one. It's the GUNNER24 Member Area where we supply you with those very precise reversals in the lower time frames. You may test our GUNNER24 Signals and the Member Area for seven days absolutely free. Interested? So click here. 

In our gold community, yesterday the question arose whether or not the September breakout of the first square within the actual monthly GUNNER24 Up Setup was significant and whether it happened considering the lost motion.

A brief attempt of explanation and the way I deal with the lost motion...