Wednesday’s action felt like a classic Doors song, you know – the one about keeping your eyes on the road and your hands upon the wheel. Well, the bears went to the Roadhouse and had a real good time following the drubbing they gave the bulls.
We have dropped warning signs about a possible market top and the clues to look for this week on a pullback and while Monday may have been a head fake, yesterday’s action was a knee-jerk to economic new and North Korea. Although support held, the next two days could be a backbreaker. With earnings season kicking off next week, volatility will certainly increase like we have been predicting.
The Dow fell 111 points, or 0.8%, to close at 14,550. The triple-digit loss was the first for the blue-chips in more than a month but the fourth of the year as the low checked-in at 14,525. The index held the 14,500 level and there is additional help at 14,400 but a break below this level could lead to a sharp pullback to 14,000. A close back above 14,600 will have everyone confused on what will happen Friday. (read more…)
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