You've seen the 10/15 min charts many, many times and how they have grown worse today. These charts can lead to swing moves of days to weeks in some cases, depending on how 3C responds during the move. For instance, 3C had a favorable response as the market was plunging early this month and that led to the market not only stabilizing, but bouncing from there, something none of the talking heads expected.
What has grabbed my attention today and brought this formerly remote possibility to look more plausible are the following charts on the 30-min timeframe.
In each chart, today did some damage that I had not thought to be a high probability of materializing.
In the last big downtrend t took a 60 min chart turning quite negative and in a few cases even the daily chart.
So I don't see a similar plunge as a high probability, but as I noted last night, the market often swing way too far one way and way too far the other, making some of our most outrageous projections seem conservative.
In addition, over the last 2 days, we have had The Fed's hawk, Evans open the door as a dissenting member of the last FOMC statement, to more QE and today, Lockhart said essentially the same thing.
They may need political cover to pull it off, which would mean a market decline, I can't say for sure. Some argue that the market will rise from here based on these statement alone. I think the charts are too far gone at this point not to see downside as 3C has been projecting. I'm just starting to wonder though whether the downside will be more extreme then the head fake to get shorts to commit? Based on the daily/60 min charts, t still seems likely that we'll see the strong rally that was part of last night's perspective and I think that will be closely connected to the QE3 situation. In any case, you've had several days to get in to position and whether it's a 3 day ride down or a 2 week ride down, you should be well positioned.
The ongoing movement in 3C over the next few days should help to clear this up, should the 30 min chart keep on falling, then I would think this leg will be more substantial then originally thought. If there's a reversal in those 30 minute charts and they gain or they quickly gain upon a move down, then the original perspective from last night would be more likely.
There are a lot of possibilities, and I need to look at them all, but I need to present you with what I believe are the highest probabilities and I would be remiss to not at least mention this possibility, even though it is no where near the kind of action we saw before the August plunge.
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