Major averages fell yesterday on higher volume, bouncing but still closing slightly below midbar, marking yet another distribution day. The NASDAQ Composite toyed with lows set on September 12 before bouncing while the S&P 500 closed below prior lows. Both the NASDAQ and the S&P 500 also undercut their prior October 13th lows, but so far have not rallied back above those lows.
Many leading stocks have been decimated such as former price leaders TWLO and ACIA. So while things are looking dicey at best, when things go from looking ugly to uglier, markets over the last few years have found a fairly quick floor, barring economic issues in China which was the primary reason behind the corrections of nearly -20% on the NASDAQ Composite in late 2015 and early 2016.
The Federal Reserve concludes its two day meeting when they release their announcement at 2 PM EDT today. With markets in a downtrend, the Fed's aim has always been to "talk up" weak markets as they do not wish to undo what they started in late 2008.
But a good rule of thumb is to never assume anything. So don't assume that markets cant crash, though unlikely, or that the Fed will automatically be dovish, though likely, ahead of elections.
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