The long, medium and short term outlooks were laid out in detail in last night's update. Each timescale gave ample wave evidence that a correction was called for each one. Having 5 timescales imply a corrective all at the same time is a rare synergy in EW theory. The bearish potential must be respected.
Now we only need to see if the subsequent patterns help confirm what is predicted. So far today's price drop on higher volume and decidedly negative breadth can be indicative of a trend change.
The smallest timescale, the Minute [v] Ending Diagonal (ED) triangle rising bearish wedge calls for a swift price collapse to at least beneath where it started. So far today's price action on heavier selling volume and breath is helping to confirm the count on the ED pattern.
The market is deeply oversold on the shortest intra-day timescale so a bounceback tomorrow would not be unexpected. However a failure to bounce could create conditions that occurred in May 2010 with the "flash crash" (that we all seem to gave forgotten about).
Yesterday's update showed, using EW theory waveforms, that the preconditions are in place for a possible "rush to exit" from the market. All timescales shown, even the cycle scale, imply there exists great danger for a historic price drop and it is imminent.
Though "feelings" about the Fed differ greatly between bulls and bears the outlook seems to be the same: "Don't fight the Fed" is the mantra taken by both sides. "Fed worship" by bulls and bears is nearly universal. I think its a dangerous trade and time to take a position firmly on the opposite side. And that includes hardcore bears who think the Fed "controls" the market. The hubris coming from Fed players (even the hawkish members think they are in control) is unbearable.
The Fed controls nothing. They are the major money player that is true, but so was the "London Whale". And you see where that got him yes? The Fed cannot control social mood nor influence. They will lose their luster. And I quite think in a spectacular fashion. They are bankers (and throw in a few lawyers) after all. And is there any great love for either sustainable in a long term social mood downturn?
They already grow nervous. And if this is reported in the mainstream, you know the nervousness runs much deeper is my suspicion. They are human, therefore subject to the same forces of social mood as you and I after all.