On Friday, the SPX continued its drop and closed at the lows of the day at 4458.58. That is a total of 1.94% from the highs. Futures rallied overnight but did not reverse the downward trend. We may see higher levels today but I don’t think this move down has ended. I expect to see more downward consolidation in the coming days to at least the 4430 area where there is stronger price and trend line support. That would provide a correction of 2.5%, which is typical this year. However, due to many uncertainties surrounding Covid, inflation, tapering, etc.., it could likely end with a 5% correction at the 4325 level. It may happen in the October time period but that is not a prediction. Nobody knows when and how this will end but as I have been saying, be ready for a 5% to 10% correction and the best way to get back in is by cost averaging down using high quality stocks. For my options trades, I am always in since I am trading both sides.
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