NASDAQ still within a somewhat broader trading range
Yeah, that was a dramatic drop for NASDAQ on Wednesday, and did smash through the bottom of the previous, narrow trading range, but... it may not be as bad as it seems. Traders actually hate being trapped in a narrow range, so now they have more breathing room. There was no true economic, business, or technical reason for the market to stay in such a narrow range anyway. That said, we still have no true trend for the market, just continued careening in a trading range.
To be clear, the big decline on Wednesday in no way is a statement about business prospects or the U.S. economy in general. It was much more about "market technicals" and "chart levels" and "trading volume".
I would venture to bet that NASDAQ will close out the month of October at a higher level that it started, although we could see more declines as trading range volatility continues.
NASDAQ futures are up modestly, suggesting a modest pop at the open. This could simply be a classic dead-cat bounce (even a dead cat can bounce), so it will be interesting to see whether much buying materializes after the open, or whether people just keep selling into any rally.
Yes, it is very possible that the sell-off will continue, but... at least right now it doesn't feel that way. I mean, we could have some incremental, modest further declines, but a full-blown correction doesn't yet seem to be in the cards.
-- Jack Krupansky