A quick squeeze and fade in the final hour of trading made it clear that the high-frequency traders are in control of this market, but it still was quite a good week for the bulls. After breaking to new lows for the year on Monday and struggling most of the day on Tuesday, we reversed big in the final hour of trading and ran straight up for two more days.
The move into resistance set the stage for a sell-the-news reaction to a slightly-better-than-horrible monthly jobs report, and downgrades of Italian and Spanish debt by the credit rating agency Fitch helped matters along. The end result was that we were saved from another leg down and are right back in the middle of the trading range that has been in place since early August.
Since the trading range began, reversal days like today have tended to see downside momentum build a bit, so it is going to be interesting to see if the pattern continues next week.