A Change of Character

The hallmark of a downtrend is a failed bounce, and we definitely saw one the last couple of days. Rather than pull off another of those V-shaped moves that confound so many market players, we had a good old-fashioned reversal. In retrospect, the move yesterday was a routine oversold bounce, which was an opportunity for bulls to exit and bears to press. They did that aggressively today.

The big issue now is whether this is just a little correction that has run its course, like the perma-bulls on CNBC assure us, or the start of a downtrend that could persist. As a trend-follower, my view is that this market has rolled over and we have little choice but to give the bears some room. That means don't rush to buy and look for selling of strength rather than buying of weakness....1243 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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