Mid-week broader market forecast update , October 1, 2014.
So as expected following September window dressing the broader markets open with an October surprise on day one with the DJIA dropping over 238 points. The S&P 500 suffers a similar beating losing over 26 points and the Nasdaq down over 78. Even though our research still shows a year end rally, such an aggressive early October sell-off now raises some additional red flags. As stated in chat today we’ll continue to remain on the sidelines until we see a retest of the 200 day moving average right around 16580-16620. Based on our research a possible deeper correction below the 200 day moving average is now in play. Back in late July after a double top the Russell 2000 officially started to turn over and hasn’t recovered since. With tax selling season quickly approaching this group may continue to suffer until year end. Our next support level for the Russell 2000 is 1050. Beyond that a more solid Intermediate cycle buy support level sits right around 920-930.
Next broader market forecast update on Sunday October 5th, 2014.