Trading Plan for 10/13

If Thursday”s drop was exaggerated by accelerated selling… then what exaggerated Friday”s drop? Maybe it wasn”t exaggerated.

Pattern points… (Setups and technicals)
Friday”s market proved it is following the template that we”ve been assuming. From the deceptive post-open rally that resolved in the session”s first plunge, to the afternoon”s slide to sharply lower lows… The word is bearish. And that word is an understatement.

The pattern of fighting back from new lows Friday morning only to trend down to new lows Friday afternoon is not abnormal. But it”s uncommon for Fridays. When it does happen, it tends to extend down on Monday. A lot.

My templates are processes of elimination, as developing price action continually limits its possible resolutions. Thursday”s bias environment exit shut the door to an upleg developing before a downleg could begin. Appropriately ugly price action barely hesitated.

I could point out the similarities to Fri, Oct 16, 1987, the day preceding Black Monday. But I don”t want to fear monger too much. So, I”ll point out that Monday”s low held a retest and never looked back as a new rally formed. Those were the days.

What”s Next… (Outlook and opportunities)
Were any stocks of interest shaken around during the past couple of weeks? Join us for this weekend”s Saturday Review to request an instant chart analysis. We”ll also review the bigger picture, which has been somewhat active lately. It”s at 9:30am ET, at this link.