Most of us tend to think in pictures.
Normal markets go back and forth just like pulling on the rubber band. Stretch it out and let it back in.
Imagine stretching a rubber band until it feels like it’s at the limit.
What happens next?
Pretty simple – it breaks.
We’re getting to one of those points in the market where one or the other will happen within the next few days.
If we continue down without relieving some of the over sold condition, we will experience a panic sell down to about 1800 or lower in the S&P500.
This is why I continue to say be careful swing trading these markets. Even if you have the right set ups to pick stocks for long trades, patterns can fail, especially in a panic sell environment.
There’s good stuff in tonight’s video –