Today's action was very disappointing as once again the hourly signal failed again. Sitting short SPY and possible this level in SPX fails leading to a bigger move down.
Scenario 2 could be playing out (with the orange boxes) where several days of churn failed to create a floor and panic ensued. As recently as today I was seeking scenario 1 to happen.
SPY continuing to drift down in its channel. Today's lack of follow through was very bearish.
Next level of support is around 177-178 in SPY. Given that the past two breaks have led to the lower BB being penetrated at least 5-6 handles, it is likely the same will occur this time occur if tomorrow is a strong down day.