Dow 30 Oct 27 to Oct 31 Outlook

Recap
The magic of intervention took Dow back up to where the waterfall selloff started. Leaving behind 3 huge open gaps with the strongest single leg bounce on daily in the history of the US stock market after a 10% correction.

Outlook
Why Fed panic is the question we have to ask ourselves. The answer is that weaknesses often lead to more weaknesses. Normal selling can lead to panic selling. Monday is last day of Fed’s POMO and last 2 QE did not end well at all for the stock market. Hence the US stock market is not allowed to trade even near the bottom area of the correction.

The rising wedge on Dow points to a break down to the start of the wedge which can be either 16300 or 16000. Given the way PPT working so hard, I’ll say 16300 will have strong support.