The Bears are rising from the dead as the prophecy is finally becoming fulfilled.
A plague has broken out in the form of Ebola. Quantitative Easing is ending and investors are now tasked with the impossible chore of keeping the market afloat without help of massive fed intervention. Rates will inevitably begin to rise sooner or later. We have temporarily diverted a financial and economic collapse from the depths of the 2009 lows, but our economy, indeed most of the worlds economies are not healthy. American markets were the last stand, the bastion of safety. Now we are merely the best trailer in the park. You can paint the picket fence white but if the wood is already rotting and the gate is coming unhinged does it really make it look any better?
If you were looking for it, the P&F threw the signal. As scary as this seems, we have barely made a dent in the epic bull rally of the past 5 years. Things can get loose to the downside as nobody wants all their profits to vanish in a puff of smoke.
There can be fast and furious rallies to the upside. The bulls have been so strong for so long. Now all of a sudden it seems as if everybody on the street is a raging bear and that sets the stage for a potential rally. Perhaps the markets form a H&S on the Daily chart but in my opinion rallies are to be sold into. People have been taking their profits for a while now, the small caps have already topped out and I expect the selling only to intensify as we head into the end of the year. You can hope for a nice orderly pullback but in the history of markets that's almost never how these outlier bull markets have ended. They almost always end with a massive terrifying crash into oblivion before they slowly begin to find support and build themselves up into a frenzy, only to repeat the same cycle all over again. Thus is the nature of markets. Do not fear, embrace the price action. There is money to be made as a trader Long and Short!
Gods speed fellow traders and investors. Protect your capital at all costs!