Best ... wait until the dust settles! US stock markets had a sell-off week, with net weekly declines ranging from, -5.2% (Russell 2000), -4.2% (Dow Jones), -4.1% (S&P 500), to -3.7% (NASDAQ Composite).

In my last trend analysis of the US stock markets, which I carried out with the help of the S&P 500 e-mini futures continuous contract (ES #) on 09/09, the telegraphed October correction or the standard October seasonal weakness "ONLY" should have achieved 2790 pts at lows, just testing back the monthly 2*1 Bull Angle out of very important higher year 2016 Bull Market Low. We all have noticed it went lower at panic cycle lows. Far, far lower cause fear = higher volatility has started to creep into the market place:

 

 

Traders and investors are now getting very defensive and doubting themselves when it comes to every move they make after the 2790 October bull market support was deeply violated at this week panic lows (2712.25). This is natural and understandable when stocks fall so quickly. Now traders must start to look for major support levels on the charts for long side trades down the road.

Trading below 2790 for October is already quite negative because the 2790 represents most strongest bull market support, which exists in the monthly time frame. BUT it is ALWAYS true: Only IF the 2790 is decisively broken to the downside by October 2018 close, also the major 2*1 Bull Angle support is finally broken to the downside. Only then we would have received a serious signal that the bull would not want to continue higher towards 3066-3014 pts GUNNER24 Uptarget! And probably a 3 to 6 month bull market correction has started...

 

 

And we are far from that. That such an important sell signal or bull market correction signal on monthly base occurs!

Above you find a valid weekly ES # up starting at 2018 Low.

The S&P 500 future found alltime-highs at lower line of 2nd double arc natural GUNNER24 Bull Uptarget = natural resistance area. I see the Kiss of Death at past week candle high made at prior 2*1 Support Angle and lower line of 2nd double arc resistance magnet. Then it started to went down the toilet and is now testing back the originally 1st double arc support environment. So far market is just testing back the natural 1st support double arc! Quite usual stuff.

Same usual stuff is now happening test or backtest of 1*1 Bull Market Angle (light green) which is at 2743-2745 pts for the weeks towards end of October!

1*1 Angle is normal backtest target and became activated backtest target after the Kiss of Death made at 2*1 Angle resistance... USUALLY both supports, the 1*1 Bull Angle and the 1st double support environment should force the market into next higher bull market low, afterwards more overall bull market up and higher highs towards year end = light-green dotted arrow outcome.

Both important supports, the 1st double arc as 1*1 Bull Market Angle have been tested - and deeply violated - in course of the sell-off week. But both have held nicely as support on weekly closing base. And this is a nice bullish signal.

But you already suspect it... usually a very first daily close in course of coming 7 trading days below the 1*1 Bull Angle = lower as a 2735 or so, should lead to sell-off continuation down into 1*2 Support Angle, the dark-green sketched angle.

That 1*2 Support Angle is ALSO very nicely confirmed important year 2018 bull market support rail and possible October downtarget cause it was totally accurately tested at first important higher 2018 bull market low which I´ve highlighted by the dark-green oval. And whenever something has been touched or tested EXACTLY in a GUNNER24 Setup, this rail automatically morphs to an extremely important possible future price magnet which the market often love to test again.

See that the 1*2 Bull Angle takes course at about 2642 pts towards end of October!

==> First daily close below 2735 within next 7 trading days activates weekly 1*2 Bull Angle at 2642 pts.

==> There is real danger that the S&P 500 future contract wants to test the 2642 pts or so in further course of October 2018! With same odd the 2743-2745 pts natural strong bull market angle support on weekly base holds at all and will be the responsible support printing the final October low...

If the first comes true, markets could drop further than 2642 pts/in course of October. 2642 is possible sell-off target in the weekly time frame. IF 2735 is broken to the downside on daily closing base within next 7 trading days even a further drop into "round" 2600 Gann number support may be on the agenda.

Because the 2600 to 2625 is a very important support area in the monthly chart:

 

 

Above is again the initially shown monthly 8 Candle up setup which starts multi-year bull market measurement at # 1 // Higher 2016 Bull Market Low. This time up to date.

As expected, the work off resp. the first test of prior activated lower line of 3rd double arc bull market uptarget caused some trouble for the bull run. The obvious pullback/correction target of 2*1 Bull Angle which runs at 2791 pts for current October candle has been significantly undercut by 2772.25 week close.

On 09/09 I stated that 2791 pts for October is "insanely, powerful, almost unbreakable GUNNER24 Support... ...which should be bought if reached until the middle of October". However, since that one is now significantly fallen short at least on a weekly base, there is a great danger that the market needs/wants to drop quickly into next major support area or very attractive down magnet which resides between 2625 and 2600.

2625 and 2600 support cushion is formed by A) 2016 Low Bull Angle that runs at 2625 for October. B) 2607 pts GUNNER24 Horizontal Support out of lower line of 2nd double arc and C) the natural, initial "round" 2600 Gann number support.

2625-2600 monthly bull market support magnet is next most important "insanely, powerful, almost unbreakable!" GUNNER24 Support below the 2791!!!, thus next Gentleman`s long entry in this still mega-strong looking and behaving bull market!

In the short-term it could go on like this for the US equity indexes:

1. October lows are finally in and were received at Thursday`s 2712.25. If true, await V-bottom recovery into higher 2018 highs, followed by higher yearly highs in course of 2019. 20% chance for that V-bottom scenario.

2. After a 3 to 5 days lasting bounce... a stronger bounce according price - as I see it S&P 500 e-mini future (ES #) could even test back 2830-2860 or so in course of next week... - the achieved stock market lows will be tested violently, even re-visited, even slightly undercut afterwards, but will be defended in general in later course of October before 2018 year-end rally starts into now activated and confirmed 2878 MAJOR Resistance Upmagnet.

Perhaps such coming re-test cycle of this week made correction low finally works off the monthly "round" 2700 GUNNER24 Support Horizontal. 50% odd for that correction low backtest swing followed by a strong year-end rally outcome!

==> the 2878 is important January 2018 alltime-high (Jan18 ATH). This prior ATH price is now in full sync with future lower line of 3rd double arc resistance and future 2*1 Bull Angle course which both unite at 2878 pts.

3. After a 3 to 5 days lasting bounce - perhaps into ES # 2830-2860 resistance - a then following next downleg breaks this week made US stock market lows vehemently to the downside. Then ES # new weekly downtarget at 2642/October 2018 and new monthly downtarget at 2625 to 2600 pts for end of October/early-November, followed by year-end rally back to 2878 MAJOR Resistance Upmagnet. I have 30% odd for this possibility into late-October/early-November...

 

Be prepared!

 

Eduard Altmann