Markets fell Wednesday with the leading Nasdaq taking the bigger hit which is concerning. It fell 1.4% compared to a 1.1% loss for the S&P 500. The round 4000 handle was supportive today at least. The S&P 500 which lost its round 1800 handle today, seems to be getting drawn like a magnetic force toward its 50 day SMA. We have discussed how the benchmark has visited that line in every even month this year starting with February. It lies at 1758 and notice how the line held in February and April almost precisely, but in June, August and October it undercut the line before quickly reclaiming it. The complacency is almost palpable that any move to the line or just below will be bought with vigor. Perhaps we will not even get to that line, but I am leaning more bearish each day. I seem to be in the minority as bearish advisers seem to be hibernating comfortably at depressed levels not seen in years. The 200 day which lies 100 handles below the 50 day presently and could be in play if that confidence in buying dips erodes. On the other hand there does seem to be an alarming amount of talk concerning some epic falls too. As always let the price and volume action of the benchmarks guide your decisions. One aspect that the bears have in their favor is the lack of good looking breakouts occurring. With their absence the continuation of the rally could be suspect. In a sturdy bull market breakouts will materialize often.
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