The bulls came into the week on the brink of a collapse and needed to hold the 50-day and 100-day MA’s (moving averages) to stop the bleeding from the prior week’s pullback.
The indexes tested the lower levels of support we showed in our chart work but got a nice bounce on Tuesday despite the musical chairs played by Apple (AAPL, $x). Shares fell $50 after announcing earnings despite an incredible quarter. The company lowered guidance but the market ignored the news to push resistance.
The Fed played a role in Wednesday’s action as they were boxed-in and had to do another $10 billion taper cut. With the punch bowl slowing draining, the market sold off hard as Ben Bernanke cut back the money printing presses and handed the baton off to Janet Yellen.
Volatility continued into Thursday following a 100-point swing on the Dow and another test to resistance. Friday’s rocky session saw continued weakness with a bullish comeback that faded into the close. (continued…)
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