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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
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* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

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Wednesday, October 15, 2014

Panic Selling Ahead for Equities?

As of 2:00 pm today (Wednesday), and further to my post of October 9th, price in equities has plunged to the next major support level of 60.00, after failing to hold a critical level of 100.00, as shown on the 20-Year Daily ratio chart of SPX:VIX below.

Price on this ratio chart now sits at levels seen during the 2008 financial crisis. A break and hold below this level could, indeed, cause some panic selling in equities...one to watch very closely over the coming days/weeks!

I'll post an updated chart after the market closes today...check back here for the update.


Here's a shot of the same chart after today's close...


Here's a shot of a 60-Day 60-Minute ratio chart. The Momentum indicator (MOM) didn't make a lower low today than it did on October 10th...signalling a slowing of the decline of this ratio; however, it did from October 13th and 14th on today's action...signalling renewed strength of this decline over the past three days.

So, as I mentioned above, the 60.00 level would be an important level if breached (and held), especially if a lower low was made on MOM below that set on October 10th, and, particularly below the lowest low set on August 1st. The 100.00 and 110.00 levels represent near-term major resistance now and would need to be reclaimed and held before any great confidence returns on the buying side. This timeframe is also worth watching over the coming days for these reasons.