Note the volatility of the SPXÂ during the last several months.Â The erratic nature of the pullbacks and upswingsÂ is certainly a changeÂ from the previous 4-years worth of trading.Â While volatility in and of itself does not necessarily portend a change of trend, it certainly highlights that there appears to be something different happening now. The stochastics are of particular interest here as they are not yet showing oversold.
Should the move down continue to the area of 1400, it would represent a correction of ~12% from the recent high.
The last several months on the DJI have also been characterized by erratic, volatile weekly moves. Again, this is somewhat of a change from the orderly trading of theÂ last 4 years. Here, the stochastics are close to oversold.
Â A continued move down to 12,000 would give a correction of ~15% from the recent high.
I should note that I do intend to provide actionable ideas here. Right now, short just about anything and your trade will quickly be in the green. However, a bounce is inevitable. Once we get at least half an attempt at a bounce, it will be time to look at individual stocks. In the meantime, keep your list of the leveraged index ETFs handy in order to play either side of the relief rally.