By Markus Heitkoetter
Buckle up…it continues to be a wild ride!
It was another crazy day of trading. At one point the DOW was down 460 points. But a late session rally lifted the markets and the DOW closed “only” 173 points lower.
Why the big market swings? Some blame it on the Ebola scare, others blame it on uncertainty over the Fed and how they will respond to volatility in the markets. And then there’s the camp that believes that a correction is simply overdue.
With the recent sell-off we’re now close to an official “correction”, which is defined as a drop of 10% from recent highs. To have a true correction in the S&P, the index needs to trade below 1,810. We were close today with a low of 1820. But the afternoon rally helped the S&P close at 1,862, just 15 points lower for the day.
The DOW and NASDAQ are close to their correction levels too. But the three indices still have plenty of room to move before reaching “bear market status” which is defined as a a 20% decline.
Whether or not we’ll see bear market status is still unknown. But we’ve been bearish these markets since our Power Crossover Method started showing downtrends in September. We’ll wait to see if there are signs of a possible change in market direction. In the meantime…don’t fight the trend!
The VIX jumped another 16% and is now at levels last since in January 2012.
Boeing Company (BA) was a picture perfect example of today’s slide. BA closed the session 1.72% lower, but it could have been a lot worse…BA was down approximately 5% before a late session rally erased part of the day’s losses.
Power Crossover Method traders were smiling today…With today’s slide BA hit our ADR Profit Target at 117.63. BA gave a sell signal on that was triggered on 7th Oct 2014 at $123.83.