Looks like we broke support on the Dow yesterday and I got several emails this morning about how this could be the worse day ever in stock market history.
Here’s what I got from David Elliott and he’s usually right about these things:
Look for a gap down open for the Indexes today.
England has posted a quarterly break of GDP of .5% in overnight.
This has crushed Asian and European markets overnight.
And is sending US futures down large percentages in the pre market.
Look for the Futures test the DJ 8199 area in pre market, and the opening move for the DJ to test and break it.
The wedge pattern that the markets have made the last 10 days should break down to new market lows for this bear market.
One thing this market has done for me is made me more comfortable trading the downside. A year ago it just didn’t feel natural. But since then I’m have several successful trades. I’ve lost too but done okay with the downside trades.
- buying puts in BAC and ABX
- selling a call spread in Google (in July when they had really bad earnings and dropped 50 points!)
- buying calls in DOG at a 85 delta and rolling down as needed
I’m also hearing the tech is the next sector to feel some real pain — more than it already has.. and this thing is going to domino through all the sectors. So, I’m looking for more opportunities to buy puts and starting to pay more attention to Elliott Wave theory. I have some great articles that I’ll post soon.