Following up on this morning's thoughts, we've seen a rejection of that "line in the sand" that marked the series of lows from October 2011. Therefore we have been below that key trend line from Tuesday-Friday. The longer that holds the more serious a threat it appears to be to the upward move.
The market has come in exactly to its 50 day moving average where it has been hovering this morning. In between those two levels (low/mid 1370s to 1390ish) I call a white noise area where there is no advantage and its just a flip floppish fish. Above 1390 more constructive, below 1370 bears should have an advantage.
That said this is typical behavior after an initial selloff, similar to what you saw in the era prior to 2007, so it looks more "familiar' to me rather than Mr. V Shaped Market. Problem is this "normal" behavior has been so rare these past few years, those positioned for it almost always get scorched. Just when you see an old familiar pattern that marked 'correction' you get hit in the face with a vertical move up.
Should be an interesting close and (drumroll) the QQQ ETF looks like it will finally break its winning streak of "all year". The only sector ETFs up today are utilities and consumer staples – pretty much the opposite of yesterday's action – we seem to be returning to some of that bipolar action of latter 2011.
Any securities mentioned on this page are not held by the author in his personal portfolio.