The Advance Runs Out of Steam

The market's response to the Fed action, actually inaction, was singularly unimpressive. It did not even generate the usual short-lived swings. But we did see important movement before the Fed announcement that cannot be ignored. The weakness was enough to take the averages below the support they exhibited on Tuesday.

Having made new highs on Monday and Tuesday, we are still near those levels, but the advance that started from the oversold numbers nine sessions ago appears to have run out of momentum. Notice, on the first chart below, that the recent uptrend line has been broken. It is too early to go aggressively to the short side, but it is not, in my opinion, a time to be buying into this slide. A move below the 1575 level in the S&P 500 would be a reason to put on short positions....276 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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