Tuesday, March 15, 2011

A Firm Downtrend?

Worries about a nuclear meltdown in Japan caused some panic selling at the start of the day but the dip-buyers went to work and moved the market steadily higher. There was some slight weakness at the close but, overall, we finished the day well off the lows. There was still plenty of red and breadth was approaching 3-to-1 negative, but the bulls started feeling better as the dip-buyers persisted.

While cutting intraday losses to such a great degree is a good thing, it doesn't do much to change the overall picture. According to the technicians, a number of key support levels have been broken and there's no notable leadership. They say this morning's lows will not set up as the key technical support level, but we have a big hurdle at yesterday's highs at around 1301 on the S&P 500.

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