No need to panic yet

The past 3 trading days were brutal for anyone bullish. I was expecting this kind of mini crash in Sep but the market God decided to postpone it. A lot of people became really excited and complacent as Sep was typically the worst month of the year that didn't do much harm at all. Why so worried at all moving into Oct which is typically a bullish month in general? As I said before, the market God is good at hoaxing people into something and then suddenly strikes without prior notice as it has the habit to punish most people the most. Here we go, in 3 days, S&P shed off roughly 60 points or 80 points in total from its recent high around 2940. While percentage-wise, it is really not too much a big deal, the volatility index, VIX, shot up almost 50% within days, suggesting there was sufficient panic involved. Technically it indeed has done a lot of damage to the S&P chart as it has dropped below its 50 DMA with its daily momentum clearly in the negative downtrend, suggesting it hasn't done its work yet for the downside risk. But for the very near term, meaning the next few days at least, the downside risk should be very limited. Actually I'd even argue for a sizable rebound maybe starting tomorrow. Could we see more weakness at opening tomorrow? Of course it is possible but I don't think it is sustainable. More likely we are going to see a good rebound for S&P jumping towards 2920ish. If I'm right that we do get there, that will be the point for another caution for the next leg down. That's the road map I'm expecting to play out, barring any significant headline risks that may totally change the path.


Stay turned and let's see how the market God will play with its cards!