Tuesday, November 16, 2010

Sweet Spot

This is the sweet spot of the selloff, about halfway done.  If you have been bearish, and suddenly find yourself bullish on this dip, the market has accomplished what it has intended.  You can only get a 100 point drop from top to bottom, like in January and April if you have the masses complacent.  QE2 did its job in getting the market complacent.  Even after a 50 point drop, you have reflexive dip buying.  I am not ruling out a bounce, especially since this is options expiration week.  But that bounce should be contained under 1190, today's intraday top.  After consolidating today's down move, we should be ripe for the final leg of the selloff down to 1130. 

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