The start of this year's breakaway gap lower saw an initial attempt to close it on Tuesday but failed to hold gains yesterday after gapping lower again. Once this range gap from Tuesday was closed, the sell-off continued to the overnight low.

Overnight has seen sharp falls across Europe following a Chinese market downside trading halt, Saudi-Iran tensions and Crude continuing lower.

The range is currently 1931.00-1991.00 on high volume of over 500k two hours before the open.

A look at the daily globex chart shows the extension lower and we may see a (short term) responsive move off the 161.8% level and high volume area. This is not a day for catching falling knives though - the short and intermediate trend is lower and I'm looking for shorting opportunities on pullbacks.

The 4hr chart shows the range since the August low was made. If longer term value buyers are interested, this is the area we may see a reaction. If prices do not hold above the composite high volume (black box on right), then we could see a push down to the next low volume area and swing low at the end of September.

A closer look at the area trading overnight shows the large range day from Oct 2nd when NFP was much weaker than expected and therefore rate hike expectations were pushed back.

The market will likely open on a very large gap lower, which has a low odds of closing on the day. Liquidations and margin calls will likely dominate the opening, so expect low liquidity and high volatility.

The zones I'm using for today can be seen against the overnight market profile chart below: