Stock indexes were able to bounce off their lows late in the session today. For much of the session the three tails left on the candles on 10/10, 10/16, and 10/22, or areas of price rejection, looked like they were going to be taken out with an apparent breakdown of a pennant, and likely another leg down on the way. The late rally left another area of price rejection on the candle, although there was much volume being built during the day which would imply that the lower prices were being accepted. The rejection was near the end of the day and was somewhat brief compared to the time spent at the lower prices, so this rejection area might be short lived. The trend is still obviously sharply down, and momentum is still to the downside. The pennant area where I drew the green lines should be broken one way or the other soon. The pennant if drawn yesterday would have indicated a breakdown earlier in the session today. I re-drew the lower line to the lows of the session today. Some might view the candle today as a bullish hammer. I don’t think the character of the hammer is enough to turn such a powerful downtrend, especially when viewed with the volume distribution. If the upside of this pennant can be taken out there might be the first sign of a larger bottoming formation. But that is a big if. At the moment there seems to be more urgent long liquidation than the urge to hunt for bargains. But there sure seems to be some great bargains as good stocks get tossed out with the overall decline.