As anticipated, stocks have finally fallen out of the ominous distribution pattern begun in the wake of early August’s heavily oversold lows. For the Dow, this implies more hard selling all the way down to 9569. Note in the accompanying chart that the sibling ‘p’ midpoint of that Hidden Pivot, 10643, was exceeded yesterday by 46 points — sufficient to imply that a further fall to ‘D’ has become an odds-on bet. Our bias as traders should therefore be bearish for now, although a dead-cat bounce today exceeding 10940 would offer bulls a very faint glimmer of hope for the near term.
