Why the Selloff Was Significant
If this bounce in the broader market was happening 30 points lower on the S&P 500, near its 50-day moving average, there would be a greater likelihood that it would help repair the technical damage of the last three sessions. Yesterday's selloff was significant because it came after bearish diversions in many of the momentum indicators, took the index into the lower Bollinger-band range for the first time this year, and broke a three-month uptrend line.
The index was unable to sustain a move above the May 2011 highs earlier this month, and now it needs to build a proper base from which to support a retest. A return to the highs without technical reinforcements could be easily repulsed, and a second failure would inflict greater technical damage and send the index much lower....379 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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