Market Update for Thursday, October 26th, 2023

Good afternoon, traders.

The S&P 500 has so far continued its relentless decline that began around a week ago after it rejected the big H&S neckline. After futures gapped down last night, we continued to sell off until we reached the magical 89-week SMA, from which we initially bounced, but then we sold off toward it again into the close:

SPX

This moving average tends to separate bull and bear markets.

As I began doing beginning yesterday, I will look at two bearish alternatives that I am entertaining at this time.

The more immediately bearish scenario remains this:

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The less immediately bearish scenario is this:

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So, those are our two options so far as I can see! The market was very complacent, and it got pushed, but here, puts are beginning to come in. Last night’s equity-only PCR almost doubled from the prior day’s, and who knows what it will be tonight. Keep an eye on that when it comes out later this evening. If it’s a big jump up again, it’s going to be harder and harder for the market to go a lot lower and that might feed into option #2.

I hope everyone has a fine evening.


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