An oversold bounce around midday was a bit early and the sellers took control in the final hour. Like Tuesday, selling in oil, precious metals, commodities and high-beta big-caps continued. Breadth was better than 2-to-1 negative with just semiconductors in the green due to continued strength in Intel. The major indices were able to hold important support levels and VIX retreated into the close. The IWM which underperformed today have weekly chart support at $82.84, which is just around today’s low of $82.73. I
The big question is whether this poor action is the start of a downtrend or just some aggressive profit taking after a good run. I was surprised to not see any sell in May articles today. With small pomo again tomorrow it maybe a range day with a test of today’s bottom, but starting Friday we will have 4 big pomo days in a row. Tomorrow’s early dip maybe setting up for a buy the dip situation. In addition, put options finally picked up today and may help to cushion the down side.
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