Markets roar out of the hole with the Dow tumbling to 550 for the day and closing down in an institutionally dominated market today, showing that even professional traders are lured into selling the hole. It was more of a phenomena where those who capitulated were sorry and those who initiated shorts scrambled to get them back (buy) into the closing bell. It was a volatile day, but an important thing to know is it kept perfectly within the trading channel and will likely continue to trek to our lower targets.
Scanning the indexes, I find the Nasdaq had the largest bounce finishing near unchanged while other indexes lost near 1% initiating a major bounce and was clearly driven by short covering. The rally from the bottom started after the oil markets closed today.
The real message here is that volatility is here and this is not a market for the weak of heart or wallet. Participating in markets like these is done mostly by professional traders who are running large books and have deep pockets, but they are in no way exempt from selling shares into the bottom which was clearly the trap for today.
These are some quotes right before the close today:
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