Fourth time’s the charm; the bulls just couldn’t pull it off after 3 failed attempts at new high and we closed down for the week. The dip-buyers made a very brief attempt in the first 30 minutes of trading on up grade of INTC and DIS, but once we rolled over and took out the low from two days ago, the bears were in control. Breadth finished better than 4 to 1 negative.
China was down 5% overnight on fears that it would tighten rates to cool off its hot economy. In addition, there is criticism of the Fed’s QE2 program during the G20 meeting. Leaders around the world are concerned about a currency devaluation competition. There was definitely a change in the character of the action today. We did hold near key support just under 1200 on the S&P 500, but after two and a half months of straight up action more correction maybe needed early in the week as we search for a potential bottom. The printing press is still running full speed, and that may give us some support later in the week as Turkey day seasonality begin to kick in.
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