Markets were introduced to some broad based selling Thursday. The Nasdaq played its recent laggard role perfectly and took the biggest sting down almost 2%. Most likely it will record its second down week in a row Friday. It is lower by 1.6% so far, and interestingly has not had a 3 week losing streak in all of 2013. Reviewing some big down days lately for the Nasdaq the 2% down moves on 8/27 and 10/8 were successful retests of the 50 day SMAs and back higher from there. Those two instances acted like a temporary, pesky pothole. A quick tire replacement and back on Bull Hwy. It has had big volume sell offs to the 50 day dating back to late February, mid April and late June. Every two months seems to be met with a big move back, and how many spare tires does the index have in Times Square? Its 50 day is at the round 3800 number and we can not say many were waiting for this to occur. Bullish investment advisers were near 5 year highs, yet others statistics show investors are still sitting on plenty of cash. The fact that benchmarks fell on the hint of taper cuts, I think shows how fragile this recovery really is and dependent on the Fed. Leaders left and right have been getting hit and another ominous development that has been underway for some weeks now. Today the energy group was targeted most seriously. To see best of breed names like PXD do what they have the last 3 sessions does not bode well for the group or market in general. PXD is down 10% this week and will most likely record a bearish outside week on some of the heaviest weekly volume all year. SN is looking at back to back 6% weekly losses. Will markets be lacking “energy” going into year end? Not many are banking on that, so make the probability, although low, of that occurring a bit more likely.

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