$4,103 Becomes Critical Support
A failed recovery of the July high followed Monday’s bearish continuation signal and confirmed a break below the 50-day moving average. During the subsequent decline there were no signs of support near the $4,203 July high, further suggesting that sellers were getting more aggressive. Support was eventually found at a low of $4,111, which is near the 78.6% Fibonacci retracement of the prior advance at $4,103. Therefore, a decisive decline below $4,103 would open the door to a deeper test of support near summer lows. It would also increase the chance that a new lower swing low may eventually develop, beginning with a decline below the June low of $3,942.