Tuesday, October 25, 2011

Pulling Back to the 200 Day Moving Average

I wrote yesterday afternoon that things were getting overbought.  I also remarked

That said, with the market clearing the 200 day moving average (exponential) Friday, traders will be in a buy the dip mentality until a point comes when that level is again broken.  So as long as this S&P 500 holds the upper 1230s, I would not expect any rash pullbacks as buyers who missed this ferocious move now will be trying to jump in as performance anxiety hits.

In the opening moments today, we've finally seen the first material selling in three weeks.  And lo and behold, where did we bottom in the opening moments?  You can guess....

I would be surprised if this 200 day breaks with all the glee currently surrounding the market. So let's see if those dip buyers emerge later in the day.

EDIT 9:50 AM - Looks like the market sold off as reports surfaced that the EU meeting for tomorrow has been pushed out to later in the week or early next week.... then the UK contradicted that report.  You have to love how people are making purchase and sale positions on billions of dollars based on these things.

EDIT 9:55 AM - Ok looks like the meeting got pushed out a few days. Big deal.  The Bazooka is still coming. 

EDIT 10:05 AM - Consumer confidence out and its now the lowest since March 2009.  The bifurcation of America is simply stunning to watch.   Reading was 39.8 vs 45.4 the previous month - and that was with a big drop in gasoline prices to boot.  There remains no recovery for many in this country...

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