Lots of critical levels to test.
We are back to using our 20% Bounce Lines, which have been a great guide all year for where we expect support and resistance using our fabulous 5% Rule™ and there's a lot of red on the board – especially the Nasdaq already below its base – which iindicates we may be consolidating for a move another 10-20% lower. Fortunately the Dow still has about 5% to fall before it's really in danger but any break below 31,680 will likely mean it's time to go to a lower-zone chart.
- Dow 36,000 to 28,800 would be a 7,200-point drop with 1,440 bounces to 30,240 (weak) and 31,680 (strong).
- S&P 4,800 is 20% above 4,000 and that makes it an 800-point drop with 160-point bounces so 4,160 (weak) and 4,320 (strong).
- Nasdaq is using 13,500 as the base. 14,100 is the weak bounce and 14,700 is strong.
- Russell 1,600, would be about an 800-point drop with 160-point bounces to 1,760 (weak) and 1,920 (strong)