October 3rd was an interesting day in the markets as both the S&P 500 and the Dow achieved new all-time highs after many thought the markets had peaked back in January. However in just a week's time not only have equities declined on all indices, but they are appearing to have reached critical support levels which could lead to much greater volatility on the downside.
S&P 500:
The S&P 500 closed out its session at an all-time high of 2937 on Oct. 3. But since that day the index has fallen nearly 3% to its current level on Oct. 10 of 2852.
Dow:
The Dow closed out its session at an all-time high of 26,828 on Oct. 3. But since that day the index has fallen 2.5% to its current level on Oct. 10 of 26,160.
Nasdaq:
The Nasdaq trajectory is a bit different than its sister indices as it peaked out at an all-time high on Aug. 31. However this also means that the index's declines have been much steeper than either the Dow or S&P 500 as it has now fallen nearly 500 points since its high of 8109 and is currently down 6% in the past 40 days.
And while a 2.5, 3, or even 6% drop in value for each index is not even considered a market correction much less evidence of a bear market, when you couple in the very recent spike in the Volatility Index (VIX), then the start of October is signalling something big may be on the horizon a decade after the Financial Crash.
VIX:
The Dow just tumbled back into the red for October but it is Trannies, Small Caps, and Nasdaq that are bloodbathing this month as risk-parity deleveraging slams US equity markets below critical technical levels... - Zerohedge
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