Back in September and October the market held each time it fell to the 13 day moving average and bounced; this continued for over 2 months. Now we have a month where even a fall to the 10 day moving average is rare - it has only happened once; hence in the market that can only go up or sideways we have to be thankful for even a drop to the 5 day moving average.
This morning's selloff (hard to use that word with a straight face) was pinned on the Chinese who raised interest rates a tad. I believe the more reasonable answer is the 'urgent buyer' (he who buys SPY futures at any price as he is not price sensitive and simply cannot wait until 9:30 AM to get into the stock market each morning) who has showed up almost daily since Obama told us in March 2009 it would be a great time to buy stocks (hint hint) between 6 AM and 9 AM to boost premarket futures by 0.3-0.4%, obviously lives on the East Coast and was not able to make it into work this morning to offer his normal gifts. Hence we did not get our normal morning mini gap up.
Bigger picture as I think about the grand year that 2011 will be, with many targets now for S&P 1400ish, that only offers about 11% upside from here. (and I assume 8% of it will come in premarket) Spread over 12 months that is only about 1% a month. Hence we are in danger of returning to a market that........ (wait for it) .....can experience periods of downtime that last longer than 45 minutes again. It will take some adjusting to no longer receive 4-6% a month as we have enjoyed constantly since 'The Bernank' pledged to manipulate the market upward (as is apparently now stated as the 3rd obligation of the Fed charter ....printed in font size 1) back in late August.
Other than that, this market has become intolerably boring - when there is no 2 way action it is like playing a table where the dealer always wins.
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