Oh...by the way.

The catalyst for the selloff. Chris says Hedge fund redemptions are cutoff this friday. So if you have deep pockets, but you are sick of your hedge fund manager partying in the hamptons while your pockets are getting progressively and significantly less deep, you may want to go to cash. These redemptions beget selling and margin calls which beget more selling and more margin calls and more index dropping and more panic and more redemptions until the market loses more in 2 days than any other 2 days since 1987 (happened last week).

Well all that will come to an end for the year this friday if our information is right. So significant selling pressure should subside.

It would be perfectly natural for saavy pro traders to participate in a final plunging of the market to celebrate and profit from this important deadline. If it weren't a historically awful bear market, it probably wouldn't make much difference. But in this environment, another 10-15% drop would be no problem.

Get ready for the bounce.

2 Pictures of interest:

The first is the big picture of s&p falling since mid may. This one lines up fibbonacci retrace levels with big movements in the s&p. The end point support prediction is the mid to upper 700's. I honestly think this is where we're headed soon.

Also take notice in the above plot of the steeply sloped lines on the right. That's a channel which setup Monday morning to guide a steep fall this week, and possibly longer.

I'd expect S&P movement to be repelled at edges and to be attracted up or down to the center, but generally in a twitchy manner with detail not unlike what we see here.

The edges are what counts. They setup reversals with elevated probability of success.

At some point, I'd expect a pretty substantial selloff. The descent of the s&p will be parabolic on a 5 minute candlestick chart, and the bounce from whatever bottom takes hold will likely be dramatic as well. I'd also expect the VIX to get close to its highs near 90, which seems to be the new panic level these days.

Some good options for bounce buys: I like 2x index etf's SSO, DDM, QLD, UWM, and also the 2x bank etf UYG. Also, oil is heavily beaten down. It has to recover at some point. Oversold is oversold. DIG is 2x oil etf.

There are inverses of all these to profit from the fall if you are so bold. SDS, DXD, QID, TWM, SKF, and DUG, respeectively. But you are absolutely playing with fire if you short without watching for the squeeze in this environment.

Have fun, and good luck!