The market has so far proven to be one of sows’ ears rather than silk purses as I surmised it was over the weekend. Everything is still in a downtrend, but the intraday situation remains decidedly in the “spin-cycle.” This makes for a decidedly difficult trading environment on either side, especially when you throw in the “guess the gap” moves we’ve seen overnight this week. It’s tough to be long overnight when the market can gap down 400 Dow points over night, and tough to be short overnight when it can do the same thing on the upside the next night.
Things spun around nicely yesterday when the indexes first opened to the upside, then came in, with the indexes pushing into the red within an hour of a decent upside open. From there, the market took off on a rally that led the Dow Jones Industrials Index up over 400 points before things settled down for a mere 1.65% upside close. And this after a wild sell-off on Monday when it dropped over 700 points, undercutting its February lows and finding support at the 200-dma. This triggered a small undercut & rally move as the Dow rallied to close off a “mere” -458.92 points on the day.
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