I am kicking myself here this morning for jumping back into the S the other day. The charts were not clear. By this I mean, it could have gone either way (continue down or rebound) and I moved back in hoping it would rebound nicely. When you look at the August 16 low of 604.38 and the October 11 high of 713.32 on the DW4500, the current pullback to 687.4 is about 24%. While it is possible that this level could hold, we could also see a substantial pullback by as much as 68%. This leaves a wide range of further drop possible. And with the RSI still above 50, that leaves a lot of downside opportunity still. Look at late July/ealry August where the RSI drop from just above 50 down to below 30 encompassed about 70 points (10% loss!!). I am bailing tonight. Not worth the risk.
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