Written By Basilio Chen

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Prices have continued down and is now oversold at the 720 minutes level.  Prices last tested the 1900 (1903) and sold off to 1863.  There is a negative divergence created in the last move signifying the down energy is exhausting, at least only until recovery to the 1920 to 1900 is retested.  We will be watching volume capitulation as final exhaustion.  Volume has been increasing. If capitulative volume does not occur, the downtrend will have more severe moves down now instead of later.

ES Oct 13 2014 720 min Profittaking

The quality of the negative divergence as shown in the 60 minutes is of mild nature

ES Oct 13 2014 60 min Profittaking