Today’s gap lower was a big test of the strength of the bull market.

It appears to be obvious that the bulls passed the test by staging a very impressive rally from under many key support levels to closing well above them and even up on the day.

Additionally the related markets that help measure the market sentiment also experience coincident reversals. For example, TLT, GLD and VXX gapped higher but sold off hard.

Days like today are remarkable examples of how powerful the opening range trading tactics are, even if only applied at a very basic level.

For example, if you had long positions that opened below stop levels, waiting for even the 5-minute opening range to also break before exiting would probably have saved your from selling the low. Personally, I prefer to wait for the 30-minute range to be set before getting kicked out of a position.

Today’s big range reversal pattern will likely also exemplify other important trading tactics, and methods for anticipating the market’s next move.

Today’s big range may look bullish on the chart, but it’s not today’s action that will tell you the real health of the bull market.

The big range reversal pattern in today’s markets is a strong indication that the market is not ready to go down, but it doesn’t mean it is ready to go up.

It’s important to see the markets follow through with more and substantial moves over today’s highs. This follow through does not have to happen tomorrow, but until it does I would interpret the market as having only defined a low.

This low, however, is not guaranteed as it should also be tested to be trusted.

Either way, the high and low of the today’s range define whether you should look for the market to move higher or lower.

Furthermore, it’s likely that unless there is a major unexpected bearish news event, today’s low will be the low for several weeks. This becomes even more likely if we see follow through to the upside soon.