Based on Friday's trading activity in the U.S. markets, it looks like a new leg down has started in this current bear market for equities. At the very least, a test of the January and March lows in the major averages should occur in coming weeks. The price action on Friday was awfully one-sided, but should not be construed as a panic bottom. When you have unusual price action in one direction like we did on Friday, that is usually the direction the market will take in the near future. It will take a similar type of day in the opposite direction, or a key reversal day to reverse this action. As the VIX is well off of its March highs, I don't expect a bottom very soon. With that in mind, daytraders might consider being biased to the short side for the time being!
Scott Cole
www.kungfutrader.com
www.bestdaytradingstocks.com
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