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S&P Crashes After US Stocks Get Dumped – Mean

s&p mini sell off

Traders were shocked by almost a mini market crash, what certainly looks like a very serious situation at least on the daily chart. We’ve had 3 days of intense selling as investors dump US stocks, causing the S&P, and the DOW to drop like a rock.

Simple mean value analysis tell us that the market has moved too far away from the mean too fast, leaving a large price to mean gap.

So provided the sell off frenzy calms down, we might get a nice intraday buy signal that we could use to setup a mean reversion trade. It’s most likely that will see any kind of recovery moves in the US session when the US stock markets come online.

Dale Woods

Dale Woods

The Forex Guy is an educational Forex trading blog run by Dale Woods who has been a passionate retail Forex trader for over 6 years. Dale trades the Forex market exclusively with price action based methodologies, believing price action trading to be one of the powerful approaches used the market today, and really is the core foundation of any good trading system. Dale also strongly believes in keeping charts clean and keeping things simple, logical and uncomplicated. By making trading decisions straight off the raw price action data, you can ‘bypass’ unnecessary variables like exotic indicators, trading robots or magical pivot levels. Dale enforces the idea that there is hardly any edge trading news and economic data releases and much prefers to make trading decisions straight from the candlestick themselves. ‘The Forex Guy’ is dedicated to providing knowledge to serious and passionate traders who want to learn the art of price action trading, positive geared money management and how to psychologically condition themselves to become a professional trader.