Jack be nimble....

Wow - some overnight moves - sometimes it pays to stay up a little longer when markets are like this.

So overnight it looks like there was a mini capitulation of sellers (see chart) - and a subsequent short-covering rally.

So now where?
The drop tagged the 78.6 % Fibonacci retracement level, and rallied 600  points - these markets are NOT for the faint-hearted- hence the title of the post -
1. this fall may mean more to come medium-term
2. snapback rallies can go further than one might think.

Strategy
keep an eye on key levels for buy/sell opportunities
if trading intraday - be vigilant - and manage risk
best strategy is to wait for key levels

Let's talk about bottoms

Here are a few sayings about bottoms

"Only monkeys pick bottoms"

" picking bottoms will give you smelly fingers"

Why ?  The usual CNBC talking heads are still spouting the bullish side...

 

" In the case of the Double Bottom Reversal, a significant downtrend of several months should be in place."

"Prior Trend: With any reversal pattern, there should be an existing trend to reverse. In the case of the Triple Bottom Reversal, a clear downtrend should precede the formation." 

Stockcharts school

DOW daily

Watch out below if that support breaks 

Triangle measured target is around 22100

Which sort of ties with the first target

DOW WEEKLY

Could be short term support around this "triple bottom" - just because everyone is looking at it - the buyers will not be strong hands

Next support is probably around 23050 (look left) 

Then 22000/21300