After an extraordinary long uptrend, lasting 105 days, we entered a new downtrend yesterday. The Fed tapered its bond buying with another $10bn to $65bn. The market has been very strong for several months and the correction we have experienced over the last few days has been expected. The S&P 500 has corrected only 4%, but it has closed below its 50DMA over its last four sessions. It has closed below this average three more times during the past 12 months, and gone above it fairly quickly again afterwards. But that does not mean that it will happen again. There have been more days of heavy selling now than during those earlier cited instances.
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