On the other hand, rumors of the Fed standing ready to whack interest rates another .50-basis points at any time from next week forward are circulating and will serve to prop up markets as they have for endless weeks now. It will soon resume and keep shorts looking over their shoulder every day, especially towards the close. The Nasdaq 100 and SOX have held fast the past two sessions while broad market indexes plunged, which is fundamental strength on its face indeed. We see a reluctance for sellers to push tech leaders down even while stock symbols with less than three letters got thrown to the wolves. It will be a long, long time before tech darlings fall out of favor with today's investor.
All signs point to further strength tomorrow but seeing is believing.
With the Dow shedding a staggering 1,700 index points the past ten sessions and -900 of those the past two, we'd say it's high time for some type of correction indeed. Friday will be a true battle of wills as the weekend draws nigh. We haven't had more than one positive Friday close on the broad indexes all year and solid fundamental reasons exist for that. Few want to hold long positions over the weekend in a downtrend market. We've been told from professional traders in the SP01H pits that large sums of foreign money get pulled from action each Thursday due to religious reasons.