The capitulation day I mentioned yesterday appears to actually be ready to happen tomorrow. As mentioned earlier I stated that the losses will likely be much greater and higher in volume than experienced back last August. Dow futures are down 540 points, S+P futures are down 60, and Nasdaq futures down 75 as we speak. I haven't seen these kinds of numbers since the crash of 2000! If the S+P were to open down 60 points as futures indicate currently, it will be opening at around 1260, or the 20% loss mark which represents an official bear market. the 20% mark for the nasdaq and dow are 2,288 and 11,424 respectively. I honestly believe we will need to "post" these numbers, which means that the market will need to close at or near these levels. That would signal a closing loss of 675 points on the dow, 60 points on the s+p, and 50 points on the nasdaq.
It will be extremely interesting to watch the world markets tonight, as fortunately (or not), the US markets are closed today. If we see a significant rebound overseas or at least some kind of stabilization, the futures could easily improve prior to the open tomorrow. We could also see some kind of response from the feds today or tomorrow morning. However, if none of this materializes, I expect the market to surpass those point losses at some point during the day (dow -1,000?), but stage a minor recovery by the close of trading as sidelined cash, a fed announcement, or short covering occurs. As for my positions, I expect to lose all of the gains from friday and more, but fortunately my position sizes are small relative to my normal trading size due to caution, so I'm looking forward to liquidating them early premarket especially if we have some positive developments by tomorrow morning overseas or otherwise, and moving forward with what will be an amazing day of volatility. History is unfolding as we speak!
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