Traders were shocked by almost a mini market crash, what certainly looks like a very serious situation at least on the daily chart. We’ve had 3 days of intense selling as investors dump US stocks, causing the S&P, and the DOW to drop like a rock.
Simple mean value analysis tell us that the market has moved too far away from the mean too fast, leaving a large price to mean gap.
So provided the sell off frenzy calms down, we might get a nice intraday buy signal that we could use to setup a mean reversion trade. It’s most likely that will see any kind of recovery moves in the US session when the US stock markets come online.