The question on every trader’s mind right now is if we will test the lows from a few weeks ago. I’d be more worried about whether or not the indices will close below that low. In other words, in taking what the market gives, odds are that it will test the lows; especially when everyone is talking about it.

Another point I’d like to make is that those who “picked the bottom” a few weeks ago have probably had their assets handed to them. I know, from personal experience, several people who are “traders” that stepped up and bought last week. I also know that those same “traders” have been bugging me ever since. Don’t try to pick bottoms or tops! Take what the market gives you through technical analysis.

There’s been a lot of talk lately about investors taking money out of hedge funds and mutual funds. This type of action is referred to as redemption. Most hedge funds have a 45-65 day redemption notice periods. This means investors must notify hedge funds 45-65 days before quarter end. Perhaps that is some of the cause of the recent selling as $43 billion was pulled out of hedge funds in September.