S&P 500 (Figure 2)
The same type of action that took place heading into Wednesday in the indices also took place once again in the early morning hours on Thursday. The index futures recovered Wednesday's afternoon losses and pushed higher to retest the week's highs. The Nasdaq futures in particular created another Momentum Reversal™ almost identical to the intraday one going into the 4:00 a.m. ET correction period. The Momentum Reversal™ was even stronger than the one from Wednesday because the pace of the shift in momentum was more substantial.
The futures are now in a trading range with only a couple of hours before the opening bell rings. They fell sharply off the 4:00 a.m. highs into support at 6:30 a.m. How this second correction plays out will be crucial for the price action over the next several days. If it holds as a two-wave pullback, the market could still break higher this week, but if it continues a slower correction off the 6:30 a.m. ET lows, then it favors a third, and stronger selloff. Right now, however, the action is in favor of holding the support and correcting off that level going into the opening bell.