We haven't had a waterfall decline since May. This one is building up momentum, the crowd is going from bullish to bearish. Anecdotally, I am seeing nervousness about tech, which is spilling over to the general market. With the FOMC meeting tomorrow, I doubt that we see a flush out within the next 2 days. But since we've already opened up the can of worms, there isn't any going back until we finish this little waterfall that we are working on. The time window for a waterfall decline is the remainder of October. As November comes around, most of the earnings will have already been reported and the decline will be in its 3rd week, which is usually near the end of most pullbacks in an uptrend.
Big gap down today just confirms that the market is very vulnerable over the rest of October. Any 10 point ES rallies intraday are selling opportunities for the rest of the week.
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