This morning the market made a lower high on the 30 min chart and that was confirmation imo that we were heading lower. Today's action was exaccerbated by the bearish ADP employment figures released and it appears that today the market priced in an equally dismal payroll number on Friday. As soon as the downtrend was confirmed on my longer term minute charts, every bounce back to key moving averages was an excellent opportunity to sell with nicely defined risk/rewards.
Contrary to popular belief (Yes I'm talking to you Dennis Kneale), the market did not go down today BECAUSE we have a new Democrat in office come January. The market already knew this would occur and thus priced it in, like markets tend to do. The market was down today because of the fear of massive job losses being reported on Friday and unemployment is by far the most important indicator to gauge the depths of a recession. When people dont have jobs, they dont pay there bills, they dont make discretionary purchases, they dont invest, they do not put money back into the economy, period.
So anyway, just remember the market is up like 15% in a week or so so we are due for a pullback as most short term indicators are overbought. We are in a trading range and simply hit our heads on the ceiling yesterday, lets just hope the floor holds our weight! I would think 900-920 is a reasonable target to expect on the SPX by week end so dont fall in love with any of these bounces we get the next few days.