Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
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 Tue-Friday”. The market has come in exactly to its 50 day moving average where it has been hovering this morning. In between those two levels (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 those positioned for it almost always get scorched. Should be an interesting close and (drumroll) the QQQ ETF looks like it will finally break its winning streak of “all year”.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
