Off the Charts
The market took a beating today after initially gapping up above Friday's high at the open. The catalyst for today's weakness was surprising success in Italian elections by former Prime Minister Silvio Berlusconi's coalition, which is generally anti-austerity and threatens to rock the boat in Europe. U.S. investors are also starting to glance at the sequester, another name for the automatic government spending cuts that go into effect March 1. The gap up was filled within 90 minutes, and then the selling intensified into the close as Thursday's low of 1497 in the S&P (SPY) gave way. The S&P suffered the worst loss of the major indices today as it finished down 1.83%.
Last week we highlighted the complexion change in the S&P as it lost support of the 8- and 21-day moving averages and the ascending channel broke to the downside. The market was able to recoup most of last week's losses into today's open, but whenever you start to get erratic action near highs it is a red flag....1001 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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