The US stock market had major turn this week. On Tuesday (10/27)09, intermediate term trend of Nasadq switched to down. On 10/28/09, intermediate term trend of $SPX switched to down. Wednesaday and Friday's big drop came with big volume. Breadth is very negative, as seen from $Bpcompq and $Bpspx. $VIX had big breakout today, which is bearish to the stock market. This is most likely just the beginning of a major downtrend and there's more room to drop. The market is oversold now, we may see oversold bounce early next week. But, we still can not rule out the possibility that market will continue to go down before an oversold bounce starts. Sometimes, when the downtrend is strong, the oversold rally could come late and shallow. As seen from both daily and weekly Nasadq charts, Nasadq is just 5 pts above important support: 2040 which was the Oct 2 low. Breaking below 2040, that would open the door to test 1960. For $SPX, it closed at the upper limit of support zone 1020 - 1035, which may provide some temperary support. Breaking through this support zone, $SPX would test 980-990.
If there an oversold bounce soon, I may find a good entry point to open short position (long BGZ)for trade 4.
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