The S&P 500 sold off dramatically hitting the low of 1930.67 closing at the low of the day. The S&P was off by 2% and down 39.40 points and over 60 points in 6 trading days from my change in trend call on September 24 at 1991. Traders need to be mindful that this could be the beginning of a longer corrective action lasting over a great deal of time. Weve been seeing and noting in our commentary for quite some time dramatic divergence that has been lingering over this price action and that it was very vulnerable to a corrective action.
We have seen the first beginnings of this and it is important to understand that very likely this kind of action will continue and very likely get more dramatic as time goes on. Prices of the potential to drop another 300 S&P points toward the 15 to 1600 range where this would be extremely important for prices to maintain and hold. Any violation of that area for electing would bring prices down to the 1200 1100 range and the S&P.
Traders need to be mindful that we have had a long run in the overall market can we could be seen a potential top forming. Unless we see a violation of the 1990 or 2000 range we are officially bearish on this action and any counter moves very likely will be sold into.
