About a week ago I did a post that begged the questions - Is the S&P 500 due for a pullback? It was definitely something to consider as the market was struggling with it's recent highs and was still in the high end of the six month uptrend channel it has been in.
Reversion to the Trendline
The target I called out for on the S&P 500 was nothing more than an orderly pullback to come test the bottom of the uptrend around 2,850. The move would have worked out to an 80-100 point drop, which is still substantial, but would have been technically sound and kept price in trend.
Diver Down
We certainly got more than a pullback to the trendline as the market has aggressively sold off the past week and shed nearly 200 points, blasting through the trendline.
As you can see in the chart below, this move is similar to the dump we got in January, though in comparison we haven't sold off as much. If this move were to match January then the next downside target is that June bottom around 2700.
Maybe we get there, maybe we don't but there will likely be some kind of green day mixed in.
Personally, I'm sitting on the sideline until I can get a little more clarity. There was a good short opportunity couple days back I don't see any clear actions at the moment.
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Disclaimer: All info in this post is my opinion and for informational purposes only