Market rallied for most of the day (2pm) as high as 10 SP pts, but as pointed out in the lead to the trading day, rallies fade steeply once short covering dissipates amid a buyers strike. Today was no different, yet a little different due to the selling off starting into an event (Bernanke). As noted here since last Tuesday’s open rally and now ~60 SPX pts lower…”don’t chase the bus” …and that was Journal lead trying to invoke the “buyers strike “ theme out there this week.
End result today, SP500 off ~1.2, DJIA off 19.15pts, NAZZ -1pt to 2,701.56, R2K +2.23pts. As discussed recently it’s unimaginable what the gov’t/fed can do immediately (premature anyway). The market although not anticipating QE3 acted like it by starting to sell off after 2pm and picking steam as the speech hit the wires by 3:45. Nothing new coming soon was all Bernanke said and considering the market is not anticipating Q3 (maybe 10%), the reaction is counter that market sentiment. The market took the absence of ‘transitory’ in speech as something more concerning, but he did blame ‘Japan’ enough (which is the same)and didn’t give initiative options as to what they may do if it isn’t transitory. This is likely the market disappointment today as policy options(bullets) were not given. All in, a buyers strike result again, yet single stocks acted a tad better, including during sell off indicating fast traders dictating market through ES/SPY moves. The market needs a good close to signal any chance of an end to the buyers strike.
Demi/ YourPersonalTrader
March gap 1279-1281 hit, was a pivotal point before...could be instrumental for a reversal.