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MARKET WRAP UP 11/12/10
For the first time since very early September, the S&P 500 tested its 20 day simple moving average at 1194, before slightly rallying to finish the day down 1.18% to 1199. Clearly, Mr. Market was been in a touch-feely mood this week, in his attempts to fill gaps and retrace back to touch moving averages. After consolidating for the past week, today was the first day that we saw some fear come back into the psyche of market players. Unlike last week, the fear this week was not of missing out on an exciting rally, but rather of getting caught in a tidal wave of selling. If nothing else, today illustrates just how quickly sentiment can shift in the market.
Nonetheless, the overall trend remains higher, and testing the 20 day moving average for the first time during an uptrend is historically a better opportunity to buy than sell. Going into next week, the critical issues are 1) Will the market leading stocks confirm any breakdown? 2) Will the dip-buyers become less confident and eventually cease their regular appearances? If the answers to those questions are no, then you can be sure there will be a scramble to load up on those market leaders, such as AAPL AMZN BIDU GOOG NFLX, for a run into the holiday season.
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The answer is probably no. All support levels looks good. Seven days of Pomo coming up. As we like to say in Vegas what happens in Ireland stays in Ireland. Another drop down would be a bear trap.
Will be interesting to see, thanks.