Monday brought lower lows for the major market indexes, in line with what I wrote on Wednesday that I was looking for a market move to lower lows, with the S&P 500 Index undercutting and closing below its February low on higher volume. Fears of a government shutdown were cited as the reasons for the sell-off. When things settled down and the warring parties appeared to be near agreement on a government funding bill, the market rallied.
Monday’s selling on the alleged shutdown news struck me as alibied selling, and when things simmered down the market jacked back to the upside. This was also technically logical since the S&P 500 had undercut its February low, setting up the potential for a U&R type of reaction rally heading into today’s Fed policy announcement.
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