Wednesday’s action was a reminder that we need to remain suspicious of any rally attempt in this environment and that the quickest traders with an open mind will be the ones to profit most. The volatility of this market may frustrate investors and swingtraders, but it is the action that daytraders thrive in, know who you are and what timeframe your edge is in. The trend remains lower and the more times support is tested, the more likely it is to fail.
One possible scenario for Thursday would be for an early rally up towards the daily pivot (which will be at 106.64) and then a failure and a sharper break of the 105 level. The best way to trade this type of scenario would to be to wait any initial strength to fade and then short as the market drops below the VWAP for the day. There is no way to know what this level would be until it happens, stay alert and be prepared for surprises in either direction, but the path of least resistance continues to be lower.