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Wednesday, October 2, 2019

Market Update 10/2/2019 - The Trap Door

 I got rained out; on my outdoor projects, so I got plenty of time to analyze the situation, and I'll be charting the open - in real time - as usual. Hopefully, I can get this update completed by the opening bell, because this is going to be a hairy open. 

Yesterday, I was watching Art Cashin (whom I respect) on CNBC, talking about support levels, and the bottom of the range, and that if we were to see that support (around the 26,600 level on the DOW) break, we'll see, "the trap door could open", which is another way of saying, "we could see the rug pulled out". This is typically what happens when key support breaks.   

I assume that's the same range we've been watching on a 5 min chart, or it could be the 50 day moving average, which was also being tested... I think probably the latter. 

Yesterday's bearish reversal at the DOW 27,000 level was obvious, and by the end of the day we were testing the bottom of the bottom of the range, and the 50 day ma. 

This morning we're seeing support levels break, but again, not much panic.

 I think, if futures were down more, I'd be more bearish, but this doesn't feel like a, trap door, moment. If the $VIX breaks out above 20 with gusto, and it continues to break out, then we can confirm a bearish reversal, but not until then.   

What was really odd, was to see the $RUT plummet to new recent lows, yet the $RVX is no where near testing the recent highs. We're also not seeing a huge flight to safety in Gold.        

Someone called this a reballencing, at the end of the quarter, whatever the hell that means.

I think we could see a sector rotation, back into energy, and you can find that chart in the public charts area.

Biotech: We've seen this sector trashed, on "corporate debt concerns", and we could see a breakout back above the 3135 level on this chart.

I'm already out of time so this is going to have to extend into a Part 2.

To be continued..

Watch the public charts, and the $VIX this morning! 

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