MASSACRE

As we anticipated a few days ago the correction will be more severe than we have seen in 2013 any of it. We can imagine a double digit correction easily in SP500, which means 1,700 territory. This kind of sell off period could take few weeks. The recovery won’t be fast and easy. The pendulum now is on the sell side. But the pessimism is not yet major sentiment between the investors. We are able to find easily many articles in the mainstream media about the SP500 will go jump back again to 2,000 or 2,100. When the vast majority of traders will be pessimistic at that point will come the recovery. But the sentiment changes slowly in many cases it takes weeks. Until that time the decline is going to be with us.

Just yesterday the market made a brutal massacre, Dow dived with triple digit and don’t forget the SP500 closed below 1,850 which is not a good sign. Today might come some slight bounce back. But that is only a dead cat rebounce effect only.

• Dow 16,109 -231 -1.41% 
• Nasdaq 4,260 -63 -1.46% 
• S&P 500 1,846 -22 -1.19% 

Take a look at the DJIA H1 chart, it doesn’t show any upside strength. Massive fall and some consolidation during the night and this morning without any significant recovering:

The BFM Assets Team.