Elliott Wave Options: Beware This Downside Zig-Zag!

Markets have caught a bit of a break from their selloff that kicked off August. And economic data, such as cooling inflation, have helped bring market volatility lower. However, while markets have started moving higher, the trend may not last.

That’s because markets don’t tend to sell off all at once over the span of a few days. The recent selloff looks like an exception to that notion, at least for now.

However, it’s possible that markets are facing a longer, multi-month decline. That will mean that there will be some sharp rallies along the way.

Right now, investors are focused on the spike on the market volatility index. However, stocks can trend lower without another big spike. With volatility still at elevated levels, investors should remain cautious.

Given how the markets are trading, investors may want to consider the possibility of a further downtrend. That would fit in with the seasonal weakness we see in markets in September and October.

For long-term investors, patience is the name of the game. There may be a chance to buy in again near the recent market lows.

And investors can still buy into some strong sectors of the market.

That includes utility stocks, which offer steady and reliable income. And it includes gold stocks. Gold prices are holding up well amid this recent market volatility.

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