Now if the market holds true to form, we'll fall no farther than S&P 1200, where the buying robots will show up as they have repeatedly for 11 weeks. I still have a hard time buying those dips, because it is so obvious in nature it feels like it should blow up - but thus far has been a constant winner for the perma bulls. If we can break the 13 day moving average... and then 20 day moving averages, that changes the complexion of things but until that event everyone plays the same pattern until it fails. Rubber band theory continues to work almost to perfection with a day lag at most [Oct 13, 2010: Pulling the Rubber Band]... buy at the 13 day moving average, sell / short when the S&P 500 gets about 2.5% over the 13 day moving average. Rinse. Wash. Repeat. Didn't even need a PhD on staff to figure it out.
As an aside, silver margin requirements were raised yesterday as the exchange saw an influx of mass speculation, which helped contribute to the bursting of the parabolic move. This is something regulators could have done with stocks in 1999 but instead they celebrated bubbles (or pretended they could not see them) rather than trying to prick them along the way.