If you were watching the markets this morning or were caught unprepared for the huge CPI numbers (which lag), you were probably sweating bullets watching the NQ fall 400+ points in just a few minutes.
These reactionary types of price swings can be very dangerous for some traders - especially right now.
But, I want to alert you that the NQ has rallied nearly 200+ points off the morning lows and may turn positive by the close of trading on Friday.
Do any of you remember my Cycle Patterns? Take a look at 10-13 (CRUSH).
10-10: N/A
10-11: Inside/Breakaway
10-12: Harami/Inside
10-13: CRUSH
10-14: Gap Potential
I think the Gap Potential for tomorrow may reflect an upward price gap and may surprise traders if this support level holds.
Next week looks very interesting...
10-17: BreakAway
10-18: Carryover
10-19: Temporary Bottom
10-20: Top/Reisistance
10-21: Consolidation
I see quite a bit of volatility over the next 10+ days while Earnings and the Fed play central roles in driving price trends.
I'm still cautiously optimistic that we'll transition into a Christmas Rally phase throughout most of October. Watch for the US markets to try to setup a base/bottom over the next 4+ weeks.
If the market recovers from this morning's lows - lookout. That should be a fairly clear sign the US markets are defending this support level with a vengeance. Damn the Fed!