Friday sold off from $NYMO reading at overbought 86.76 on Thursday, its a good indicator to look at for short term setups. While the open was weak, most expected a bounce back given the recent Fed zero taper, the $TICK didn't hint at the eventual sharp decline either. Also, the declines were not broad based as Mid caps and tech didn't follow along with SPX/INDU.
SPX -12.43 -0.72%
INDU -185.46 -1.19%
RUT -2.44 -0.23%
COMPQ -14.65 -0.39%
The Fed surprising the market with zero tapering sent us higher but triple witching on Friday, and the markets distrust of this move up took us down erasing all the gains made. Whats useful to look at is that the peak on Friday seems to be approx 0.618 measured move of the recent move up. Along with the House vote on Obamacare and possible Govt shutdown (again!) may lead to some bear action in the coming few days. For the bulls, while we have closed below Aug peak we still are within range for a bounce here, and as always the Fed's got your back :)
(for the conspiracy folks, the PPT usually kicks in at critical levels unless they want to apply some political pressure by a crashing market to get the House in order ;).. enjoy the week
