The index just managed to avoid closing below the April 7 low of 3482; however the bears will now clearly be eyeing the February 5 low of 3418. 3418 is also key because if we see the index close below this level at the end of the month, it will print a bearish reversal at the trend high and on the monthly chart this can be very powerful indeed. With the five-day moving average accelerating below the ten-day moving average, it certainly suggests staying cautious here.
On the hourly chart the index is significantly oversold, so caution is warranted in chasing the market at current levels and selling into this move; traders may wait for some short-covering to materialise before initiating new shorts.
The volatility in this market this week has been huge and trading this index has been tough, given the whippy nature of the price action.