Global equity markets fell on Tuesday as investors shed risky assets. The sharp sell-off in the SWI 20 index was triggered by a solid rejection of the established resistance line at 6580.

Downside momentum of this emerging pattern was fast and furious leading some traders to believe that this 240-minute Descending Triangle chart pattern is likely to continue lower on Wednesday. With enough selling pressure to back it, this index could possibly break the support line to become a full-fledged completed chart pattern.

The tendency of this chart pattern is to produce low Initial Trend ratings because of the sideways nature of the formation. However, because of this, the Uniformity and Clarity ratings become more important. With 6-bar and 7-bar ratings respectively, these two indicators support the idea that this chart pattern is likely to finish this move by eventually breaking out to the downside. High volatility and clear direction are likely to draw the attention of aggressive traders who may continue to explore the short side even though three bottoms currently stand in the way of a total breakout to the downside.

The Autochartist PowerStats Expected Range for the day is 6522 to 6389. A test of the high end of the range will be within the boundaries established by the chart pattern and represent a retracement most likely due to short-term oversold conditions. A test of the lower target price will mean that sellers pushed this market through the support line, thereby completing the pattern and setting up this market for further weakness.

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