S&P and Me
What else do I have to do?
Since the uptrend began in March 2003, we've seen 16 days with drops as large or larger than we saw on Tuesday in the S&P 500. Only twice did the S&P then go on to three straight days of gains - 8/5/03 and 4/20/04.
The August '03 instance was the low - the market never looked back from that point. The one in April '04, on the other hand, pretty much marked the top as we declined into May. One good, one bad - that doesn't tell us much.
If we just look at those times when the S&P snapped back by at least 1% over the next few days, then the three days after that showed an average return of 0.0%. With that knowledge, and the February highs looming straight ahead (and the +1300 TICK we saw a bit ago), I'm not looking to add any long positions at this point in the S&P.
I've mentioned a couple of things over the past few days (odd lot shorts and SPY volume) which showed some level of capitulation among wrong-way traders, but I've been surprised by the magnitude of the snapback. My guess is that this is about it for the S&P for the time being, so if we power higher and hold above those Feb highs, color me flumoxxed and frustrated about sitting on my hands.
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