Unless you've been hiding under a rock, you're aware that the market has corrected approximately 2.8% in the past three days. The downside momentum is strong, and selling pressure is taking the market down with a quickness. Some call this action "a healthy pull back." I disagree. There is nothing "healthy" about a 3% downside move in 3 days. Although I do feel the market was in need of a pull back to the tune of 3% or more in order to keep things under control, the fact that the action took place in 3 days is not "healthy."



Now that that's out of the way, let's take a look at where this downside pressure may take us. Above is a chart of the Dow. As you can see, uptrend support has been broken here. With the uptrend line taken out, I like to look to Fibonacci Fans for guidance. During February's correction, downside action subsided right at the 38.2% Fibonacci Fan line. In this case, that would take the Dow to the 12,900 - 13,000 level. Keep an eye out for stabilization at that range in the event we do see continued downside. I will be looking to buy if we reach that level, and you may want to consider doing so as well.

Andy Swan is co-founder and head trader for DaytradeTeam.com. To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here.