It is impossible to really know how much further the sell-off from last week has to run, but a capitulation point has not yet been reached. This suggests that the correction is not yet over.

For starters, we have the month of September, the worst month of the year for the stock market. September is usually at its weakest at the end of the month so it makes sense that we have not yet seen a capitulation move.

Charting the Nasdaq in the daily time frame we see no sign of buy the dip traders stepping in, which would show as a higher, lower shadow, on last Friday’s candlestick.

The S&P 500 looks the same.

If we look at a regular Nasdaq candlestick, daily chart, we do not see a large body, a long lower shadow, or any pattern that would suggest a capitulation reversal move higher yet.

The S&P 500 daily candlestick chart looks the same.

Traders will turn their attention to the Federal Reserve next week as the central bank holds its last meeting before the U.S. election. While the Fed is expected to continue with a dovish note, it may not give market participants the policy details they want to hear.

The Federal Reserve has a long standing rule of not interfering with Presidential elections by making any big moves so close to an election. This means that the Fed is not likely to tweak much its buying of $80 billion a month in Treasurys.