shake-out

As climactic as today's downside action was, the only thing it seemed to resolve was to shake out the "weak" hands, and seeing more upside isn't out of the picture.
To start with, the VIX came very close to it's most recent lows before bouncing up and seeing markets tumble.The Dollar strengthenedTreasuries are a dead man walking:The SPY set up perfectly this morning. Price stair-stepped the gap-fill.We have seen how powerful these moves out of consolidation ranges can be, and as strong as it was, price is now flirting with returning to that very same range!!!Price gapped up outside our keltner channel this morning and above R1. The sell-off turned around right at the lower band of the keltner channel (corresponding with 200MA, AND a momentum divergence). The next leg of the move down ended right around S2, corresponding with the highs from May 29th, that preceded a large momentum gap up into our current range (also present was a building TICK divergence as can be seen from my 1-min chart above). The arrows on the chart just highlight how well price reacts to the Keltner channel; and when price is trending outside the channel, you know you have an impulse move that can be profitable when looking for little continuation setups on a shorter time frame (flags, pennants on a 1-min chart for example). Two strategies I've mentioned before worked today as well. First, we had a First Cross short setup (we also had one yesterday which I forgot to mention).
Also, we had a gap up and a return to the previous day's close. Granted our move to the PDC was quite long in the tooth (and therefore, the probabilities are lower), but we had the low of the day up to that point did register a lower TICK reading AND we had a Support becomes Resistance setup ocurring at the time. Not to mention, this is a SCALPING technique!