For whatever the reasons the markets were freaked....maybe govt. shutdown fears, trade war with China, FED hawkish stance, etc, etc. What started out as a slow grind down continued with a vengeance into the close with the Dow down 726 and SPY down 6.76. Both DIA and SPY closed below the S3 pivot...weakness seen only 3 times in the last 250 trading days. Volume was slightly above the 30 day average but tomorrow's action will be a much better gauge of whether or not the markets can hold above the 100 day MA.
After hours QLD is down another .5 % but anything can happen overnight. We're most likely to see a selling follow through at the opan and then its anybody's guess. Amazon closed down $37...the low of the day and that's a bad sign since AMZN always recovers from daily low to some fib threshold.
Our signals for tomorrow are 50% Long and this one is a longshot from a risk perspective. I'm personally scaling back from even that signal as the risk/reward is suspicious. While its true that Fridays have shown a recent tendency to be bullish (in contrast to the past 10 year historical pattern), this may be the exception. If we get more selling then the SPY 100 day is at 260, a lower risk entry point for those that aren't afraid to catch a falling knife.
BEWARE THE TRAPDOOR TOMORROW.
