No real damage done here at this time; thus far both the S&P 500 and broader Russell 2000 have simply pulled back to (or near) their 20 day moving averages. I am going to take the opportunity to begin rebuilding some of the index exposure I let go in the S&P 1148 range yesterday.
[click to enlarge]
In the larger scope the S&P 500 has at the bottom 2 layers of support - the 20 day moving average (1130) and the area this entire breakout began from (1120). On the top end, obviously the 1150 area we mentioned. [Next Key Point on S&P: 1150] Can't read too much in the movements in this 30 point range - nor can we call this a double top at S&P 1150; much too premature. We've seen this pattern countless times since roughly May 2009, after which a "V shaped" rally takes us over what appears to be a double top. Only once will the pattern change and the bears finally have their victory.
With the MLK holiday on Monday the almost comical "Monday morning mark up" that has been a hallmark of the past 3 months won't be offered. Will it resurface Tuesday? Or will Asian markets selloff Monday after seeing the weakness in domestic shares? If only the Magic 8 Ball offered us these answers.
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