If you understand the idea behind conditional heteroskedacity (GARCH, etc.), it is not that unlikely at all. Same reason I mentioned it much earlier in the thread. You are much more likely to get wildly volatile swings around highly volatile days than under normal conditions. So the fact that you called it right (and I guessed volatility very close) is for the reasons just mentioned. However, the actual direction isn't quite as predictable. That's why so many black monday threads didn't make much sense, since the volatility was so low during those long periods, it was not likely to expect large volatility. Under this environment, however, it is. So you should expect black/white swan calls to be more accurate under this environment. Meaning, short term traders betting the farm on direction are going to get chopped apart (Incidentally, there is a bit more likelyhood for the swans to be black as volatility tends to correlate negative to gains).
I think the short-term bias is clearly to the upside: 1. hollow red candle (spy, xle, xlf, qqqq) 2. we have re-tested the bottom successfully 3. there is FEAR of a Black Monday, so the buyers will step in on Monday unless somebody nukes somebody over the weekend. I agree with you that the recent volatility works both way so we could go UP huge. we could go down huge too, but the odds are against it as I indicated above.
in any event, the bottom is not yet in....major trend is down. i understand that most bottoms occur on a Monday, vs on a friday.
I have to agree with you. I think we could be in for another White Monday like we had Columbus Day. That day was great for the weekend longs (like the OP)!
Nearly every market around the world is down, I was thinking Black Monday and am short. Should I get out?
I see a descending triangle on the hourly DJIA chart, looks to me like a cliff drop is coming soon, the fear-o-meter needs another scarier test than the last one to 7800, I'm seeing 7200, would be nice if we could just get it over with.