________________
Last night’s video recap centered around the idea of managing risk even as intermediate-term technicals seemingly improved, out of respect for the potential of selling to beget more selling. With the second gap down in a row in as many days, this time even more prominent, the selling has intensified more than I would like to have seen after the recent rally. Wild price swings and increasing volatility tend to favor the bears rather than the bulls, due to the loud disagreement amongst market participants. Bulls wanted an orderly, quiet pullback or period of sideways action after the recent rally. Obviously, that didn’t happen, and we are back in an increasingly nebulous situation, as has been commonplace in this market for many times in 2011.
Despite the increased selling pressure, the S&P 500 is merely pulling back to test its rising 20-day moving average. So, the bulls have an opportunity to step up and defend not only that reference point, but also the top end of that multi-month trading range of 1120-1220 out of which we had recently broke.
________________
Nice one
say hello to my friend…….senior snowmang