If you recall my last post I said to be careful in the indexes as things may get pretty ugly to the downside. And with our FOMC Pop higher on Wednesday and massive over 330pts in Dow sell off Thursday and another 30+ plus points down in the S & P 500 today and leading NQ over 100pts lower-- we are definitely seeing the move down. Its typical to see selling into next friday, Oct 17th Options Expiration but I still believe we are going to see at least a 10% correction possible more! So even though we've been in a Bull market for the last three years it looks like we a forming a head and shoulders pattern, probably will get some bounce after expiration to form the right shoulder a little more and down we go. And yes with this Trend change the Russel has been leading it and with today the Nasdaq leading with strong selling. and here's the emini S & P 500 from todays move 31 pts down for the day!
ZBZ4 30 yr bond has been just trucking along higher with the correlations looking strong to go higher if your still in this trade like I talked about. Next target will be about a full point, almost 32 ticks from here to the 142'08 level.
GCZ4 Gold contract has been bouncing nicely off this support level around $1190ish level, I would expect more money into gold too as a hedge with the markets being volatile and should see gold continue moving higher to possible around the $1245ish area before it will crap out and start heading much lower and be on its continued journey to around the $1000 level.
There has also been a flight to quality with the Yen and the Dollar Index going higher.. Stocks will not weather well as long as the Yen is going higher and that will be continued pressure for more sell off.
Have a great weekend everyone! Be safe trading this next week, remember never let a winner turn into a loser, take your profits at targets---DONT BE GREEDY and get out of dodge!
-david
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