Yesterday the market opened flat and fell almost immediately out of the open. It set a morning low at the 10.00 reversal time which was retested later in the morning and again at 11.15. At the last retested at 11.15 the market failed to hold and fell very sharply going into the noon hour. It continued to bleed throughout lunch and the rest of the afternoon closing on the low the day leaving one of the biggest red bars on the daily chart that the market has seen in a while. The SPY was the same. Yesterday was a fairly unusual day. We discussed the likelihood of the market pulling back possibly all the way to “3” given the daily and hourly chart that was set up yesterday. However this decline came all in one day on a very large red bar. This is not what we want to see as traders because it’s questions the pattern that gives us the greatest odds. The weekly chart just resumed a new uptrend, and while a daily chart was very extended going into the beginning of March, it had a full pullback. The retest was not expected to make a new high initially, but falling all the way back to “3” is not only more bearish then we have seen recently, but to do it all in one bar makes it very difficult as it shows a larger scale distribution. While “3”is still a critical support area, extra confirmation will be needed as prices will try to move off of “3” because of the hard decline to this potential support area. There is a very high likelihood that today will be a fairly narrow day that will see both top and bottoming tails and possibly testing the area at “3” early in the morning.