Once again cash indices were decimated via their index futures on Friday. Market is deeply oversold and the possibility of a massive correction / crash is higher now than anytime since the recent sell off began. Although that possibility cannot be rule out, but the likelihood of it happening at this point is extremely remote for many reasons. The top reason, imo, is that a financial meltdown at this point is not beneficial, short or long term, to the handful of global investment, trading and banking firms who control all financial markets (i.e. Big Money). In fact, it would be quite damaging and therefore it's extremely unlikely that it happens.
Having ruled out a crash, Market is left with only one choice and that is a rebound. It's hard to say how far indices would recover, but a 50% retracement is well within cards. Assuming SPX 1261 as the low point for this correction, it's likely that SPX rallies to higher 1310's to back test its 50D SMA sometime in the next two weeks.
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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation. Furthermore, the opinions expressed may change without notice.
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