More Downside To Come...
Volume picked up today to 187 million shares traded on the SPY, but still under the 200 million, (or above) that usually produces a DOWN day. That's 2 day's that the market fell with light volume. What do you think will happen with heavy volume? Yeah... now you're getting exciting!
I expect some news out in the next few days to be reason for the big fall, but it's really just the technicals that are pointing down. However, people trade with their emotions, so a bad jobs number or some other news could be just the reason to sell hard. Regardless of what news the media blames for the coming fall, I don't care... I'm just glad to see the technicals starting to work again.
As for tomorrow...
We could pause or go up a little during the morning, and then sell off in the afternoon. If the market closes tomorrow below the low today at 109.27 spy/1088.61 spx, then that will confirm the move and the market should fall quickly to 107.65 spy-108.00 area. At that point, we should have a bounce.
We could push down to that level on Friday, and then rally back up next Monday for option expiration. I'm told that the "Current Pain" is 109 spy for this opx. The difference in current pain and option pain is that current pain only takes into account the last month of option purchases, whereas the option pain list all the purchases since the option became available. That could be over a year ago... which really doesn't make the market move to that area as those positions are too old. The last 30 days of option purchases is more accurate.
So, it's possible that we close next Friday around 109 spy. I suspect we will go down to the 107.65 level, (or possible lower?), and then back up for option expiration. However, we could just bust on through to the 104 level before a bounce? Any thing can happen at this point, so let's just hold on and see what happens over the next few days, as we are headed down for now.