What a blood bath!! All three major indices got hammered.
— Alexandros Yfantis (@alexanderYf) October 10, 2018
So what now? September and October have always been ‘bearish’ months…or months that historically have provided big crashes like the one today and several weeks of declining prices. So why not again?
Technically we are support levels now. This 2770-2760 area is an area of previous highs.
But after such a strong one day decline, one should expect more downside. I would be surprised to see market off these lows and start a new up trend. I believe we have entered high volatility season and traders should be very cautious. I have been bullish as long as prices held above 2900 and 2865….but now things have changed.
Price has reached its 200 DMA in one day. This is another support area and a big battle is expected to take place around current levels.
Will this unfold into a bear market as many people fear (or hope)? Even if we are in a major top like in 2007, the market will surely provide opportunities to sell. Do not be hasty…let the dust settle…Back in 2007 the market gave the opportunity to go short while the market was just starting several times…take a look….notice the battle in the 200 DMA?
Whatever scenario the market holds for us…be patient…
thank you for taking the time to catch up on my thinking