The indices were flat to down, breadth was negative, and the dollar was stronger, but Gold and silver were hitting new highs. Despite strength in a number of other commodity-related stocks, Ambac’s bankruptcy after hour is likely to dampen the bull’s enthusiasm. In a normal market, after the run we had, there may be a few timeframes to expect a brief dip:
1) 2 days before option expiration week
2) a day or two during option expiration week
3) a day after a bullish option expiration week.
With the Fed involved, the timing of the pullback will be tricky and the magnitude may be small. In addition, bears will be competing with fund managers chasing performance into year end and buyers are still optimistic on the new QE II money.
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