Bounce … (Not Beyonce’)

Posted on Jun 06, 2013 by in Letters

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=9&dy=0&id=p88150915824&a=214966864

Over the past 20 plus days or so market tempo speeded up and got ahead of itself, especially so with so many contrarians aching to short the move they had so underjudged and missed out on.  Finally when Bernanke bobbled his testimony to Congress traders fled the market and contrarians jumped on.  They broke a relatively insignificant trendline and the resulting downwave is more or less (m/l) 4% .  But when that 4% includes a 38 point range day in the SPX and a 278 point day in the Dow the herd gets restless to where the least little lightning strike will start the stampede.  Or Garrison Keilor singing off key.

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