Momentum raid... day #2

The same trends outlined yesterday continued sliding the market some ~ 30 SP handles in total, since Sunday overnight highs. Only difference is the free fall in the USD resumed, but the commodites acted as if the reverse was occurring.  If the market doesn’t act right with a declining USD, the market is left with little support as ‘fresh’ catalysts are unforeseen at this stage to help it get back on track. This was the worry this market in updating a visit to SP1338 and possibly lower is a possibility.  The ferocity, sharpness of the weeks declines in ‘momentum stocks/sectors will draw quick traders for a bounce play here and there, but true buyers are unlikely to return just yet.  

This decline is being done with profit taking, we have not seen short sellers even try to press this market lower as they’ve been bitten over and over again and are quite wary.  If the market continues to give out ‘bad eco’ data like today’s non-ISM( showing a significant slowing), confidence will built and with no buyers likely on 1338SP front, a move sharply lower could ensue from shorts finally pressing the market.  All  in, a tale of caution at this point with signs of waning momentum in the US eco’data.  We recently saw the Shang go below 50MA and other Global markets have been much weaker vs. US markets.  A little US catch-up to the downside is likely the prognosis.