Here is the Dow Jones, weekly chart going back to 2002. The last couple of weeks the market has continued its decline. It has tested the November Lows and today barely broke them. Yet, it still has yet to significantly test the '02-'03 Lows. Remember what this chart looks like.
Now, on a daily outlook the market is oversold. We have had 3 of the last 4 days down on the DOW and the up day was barely an up day. I can assume by using the SPX RL's that the DOW is also almost at a 100% RL. So if the DOW drops tomorrow, it should bounce off those '02-'03 lows, RL's and lets not forget, OPEX is tomorrow and shenanigans will be played.
So if we get an up day tomorrow the last 2 weeks on the chart could look like this.
Those two candles are from Oct 15th and Oct 16th 1987. If you don't remember what the chart above looks like scroll back up and take a mental picture. Now lets look the year 1987.
This chart is from May 1987 to Oct 16th 1987. To my piker eyes, it looks very similar to the DOW chart above. Removed the date and numbers and it is almost the same. The market touched the lows in late April and May (Just like the '02-'03 lows we could test) and bounced off them. So Friday Oct 16th, the market closed off the years earlier lows. All indicators were oversold and looked like it might be a bottom.
Of course we know what happen on Oct 19th.
So does this mean we are going to have a crash Monday? Maybe we do but the historical probability that we are are so low that calling it would make me just as dumb as; Cramer or the rest of CNBC crew(Minus Santelli and Erin Burnett (I love you!)).
Also lots has changed since changed since 1987. The biggest was the PPT was created right after the 1987 crash! Monday if it looks like we are crashing in the morning they can certainly come in and stop it.
Plus, just like Trader X says from The Art of the Trade- The market is never the same, because the players are always different.
But I do think we test the Nov and 02'-03' Lows. And its official $NYSI broke the Zero line
