This is what happens when a long standing support cracks
Panic Sell off
Trading Rule: When one level cracks – then market races to the next level of support. That support stands at 200 dma.
S&P500 had a dream run for last many many months and it never cracked even below 100 dma during that period. But with market now cracking below 100 dma: expect total bearish pressure on markets. Today we saw dramatic selling in US market. Buy the dip crowd will now give way to sell on rallies crowd. We are going to witness a different market over next few weeks and hence be careful.
Remember, when markets break down: No support is good enough to stand the bearish force. We have been cautioning on a market for a while and now its time to just stand aside and let the bearish force play itself out.
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