The chart of the S&P 500 gives some clues as to why. After two years of steep bear market declines the market has astonished everyone by retracing more than 50% of it's loss in a very short time. Historically the 50% retracement area is a big source of resistance. Also, the lower chart shows us that momentum has been steadily declining.
The Obama attack on the banks last week is being blamed, however, the chart shows us that a correction was already in the cards.
We are still in a longer term uptrend and this move down should be considered a short term correction only.
We are probley looking at a decline of no more than 10%, if that.
I did, none the less, liquidate our positions in QQQQ on Thursday and SPY on Friday and will be looking to re-enter the market at lower prices.
(Click on chart to enlarge it for easier viewing)
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