Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
This market is starting to look similar to June and July. Just as the market went through a significant selloff, it would reverse on a dime in the overnight session. In fact, just as enough distribution hits to put Investors Business Daily into “market in correction” (which they just changed to) you get the overnight gap up and run.
In true George Costanza manner, S&P downgraded Spain 2 notches after the bell yesterday – that initially pushed down futures but as the night passed, “bad became good” because people believe this downgrade will force Spain to ask for the bailout we all know will eventually happen. So you get the same sort of action as June and July with the European headlines causing an upside ruckus on a very narrow data set of days while most other days show weakness. I remember a period earlier in the summer where the market was down 15 of 22 sessions, but actually up in that 22 day time frame since the up days were so vicious (and mostly on overnight gap ups).
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