Prolonging the Panic

Todays market action is within the parameters I would expect under the current panic conditions. The markets are moving almost entirely on emotion and therefore somewhat unpredictable in their behavior.

While the technical indicators are oversold, they are also well outside of the normal ranges indicating that one should be careful about looking for a bottom too soon. The urge to sell, either just to escape or to scalp, is stopping any attempts to rally and work off the oversold condition.

Eventually the markets will turn higher here but it may take another day or two of behavior like we saw today before this occurs. No need to be a hero.

SPX 65 minute (6 bars per day) Click to enlarge

SPX Daily Click to enlarge

MCO for 10/7/08 Click to enlarge