This afternoon we took our third shot at the swing lows in the "pin" from August, and bounced - weekly.
Then, after the bell, Intel disappointed.
The Nasdaq Futures gapped down on the reopen at 4:30 by thirty handles, and as I write this are down more than FORTY TWO handles
If you were long them, you're dead.
The S&P 500 futures gapped down almost 10, and have continued falling, now down 13. The significance of this level is that they are now below 1370 on the S&P 500 cash, which is the bottom of the pin from the August lows.
There is a very real possibility that the market could crash tomorrow.
Not next week, or next month.
If you're long pretty much your only hope is that BenDover Bernanke comes in and intervenes in some fashion in the morning. If he does not you are looking at a gap down in the Nasdaq of more than 2%, and if you think Asia is going to "miss" what is going on here, you're wrong!
How bad could this be?
Down 500 on the Dow. 50-100 handles on the SPX. 200 handles on the Nasdaq.
3, 4, 5% - one day.
Now is this assured? Absolutely not! In fact, there is really only about 20% chance of the "Gates of Hell" outcome arriving tomorrow.
But think about this - on any random day, the odds of a stock market crash are basically zero.
Tonight, I rate the odds as one in FOUR for TOMORROW.
If you're long and trapped there is absolutely nothing you can do about it right now. The futures have already gapped down huge, so you can't even reasonably short them to hedge; the risk of a whipsaw is extreme.
Don't get complacent and pile in after-hours. Be aware of the very real potential for intervention; in fact, I will be surprised if something is not attempted.
But - with that said - it may also not work, or even make it worse.
Right, wrong, we will know in about 18 hours.
If you're long, I bet you don't sleep well tonight.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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