Weak Bounces

That bounce on Friday just didn't have much firepower.  It is almost as if the trend faders are taking control and not letting these moves go too far down or up.  On Thursday, you had a morning dip down to 2115 and it was bought ravenously by the dip buyers.  Then the day after, with a lot of paper napkin chartists raving about the intraday reversal, you get a gap and crap.  Which brings us to today.

The market feels heavy, with the weight of the election, and uncertainty about a possible Democratic win in both houses of Congress worrying about possible negative ramifications.  It is now beyond Trump.  Even though he gets all the headlines, the real worry now is that of a Democratic sweep which gives them a mandate to push through higher taxes and more regulations.

Also, the market breadth has been weakening over the past several weeks, as market leaders have kept the indices afloat while secondary names have been declining.  It all makes for a market that is looking to make another leg lower, one that will probably be just enough to scare the short term equity traders, but not low enough to let the value buyers and the extra patient get entries before we move higher.  And yes, I do think this is just a dip that refreshes and takes us back to new all time highs.  But this dip should last for the rest of October, and then we'll have to see from there.

I have a feeling that we will be getting a Santa Claus rally and a beginning of 2017 boost higher as the final skeptics throw in the towel and create a mini blowoff top.