Are we heading to much dreaded 10% correction ?

VIX making new 52 wk highs, once an index makes a new high, it has a tendency to make series of new highs...Bearish picture


Nasdaq & Dow below 200 DMA.....Bearish picture...more downside


S&P 500 just a hair above 200 DMA....Bearish picture...more downside


RSI @ 35.12.....Bearish picture...more downside


Bulls 48%....Bearish picture...more downside


Bears 32%....Bearish picture....more downside


Many traders gets very excited when we have an oversold bounce, but immediately we get slapped down with renewed selling, in short term that picture remains intact......Bearish picture...more downside...


SO...where is the first support for S&P 500, it is 1840 area.....we can build from here IF there are enough "buyers with conviction not short covering"


SO..how to adjust to this "bearish reversal"....????


Keep expectations very low.......


Adjust to "new TAPE"...very quickly


Margin call to be anticipated & acted upon immediately, not delayed to minimize portfolio erosion.....


There will be cascade of margin call selling on Monday, hedge funds who are long may have "billions in margin call"...thus a quick sell off till 11 AM to 1 PM.....


Expect some stabilization going into close on Monday


Try to stay diversified, not overweight in one sector.


I have a feeling we may be heading towards a full blown correction of 10%.....before it is all over ?


Earning guidance may be sloppy for Q 4, which may trigger full blown correction ?


BLOG does NOT give buy or sell.


Saleem

Posted in: Mixed