Within the present correction a bear stand is the only logical position. Sure it can turn over, and with the current volatility it may well go up or sideways. I believe there is still margin for the SPX500 drop at the very least to the 2591, as that is the full Fib retracement of the previous up swing. If Europe opens lower and Japan and China bleed all over there is no other path and something really unexpected would take us out of this quagmire. But beware! This may well not rest at the fib prediction. If we go lower up to 2394, this is officially bear market territory and it will take several months to get out of there
Some other reasons that lead me into believing we can continue, is how fast we broke the previous channel, and even it's projection lower served as poor support. It hang in there for 3 days, then it broke that level with one slight visit upwards, which confirmed the down move. Momentum is really low, and even if it may turn upwards, It is in deep bear territory. Bull approach at your own risk
This said, with such volatility, I will enter cautiously looking just to get out as soon as we reach the fib level of 2541. I will use an almost 1:1 risk reward ratio; something lower like 1:2 or thereabouts would stop me before this morning for sure.
Some other reasons that lead me into believing we can continue, is how fast we broke the previous channel, and even it's projection lower served as poor support. It hang in there for 3 days, then it broke that level with one slight visit upwards, which confirmed the down move. Momentum is really low, and even if it may turn upwards, It is in deep bear territory. Bull approach at your own risk
This said, with such volatility, I will enter cautiously looking just to get out as soon as we reach the fib level of 2541. I will use an almost 1:1 risk reward ratio; something lower like 1:2 or thereabouts would stop me before this morning for sure.