A Few Ideas on Why the S&P 500 Has Held-Up So Well

Recently, it has seemed like the market was looking for a reason to go up. Bad news was taken as a buying opportunity.

There was a change in market sentiment last week. The market finally found reasons to sell-off.

The move down was relatively minor and quite orderly. The S&P 500 is sitting comfortably in a support zone. The following chart shows that the move down did not come with panic selling and volume remained light.


110509 Support Holding on the SP500 Index

The move back to support burned-off some of the excess exuberance. So, on the next push down, let's see if sellers get another bear trap sprung on them with a pop higher.

As I've said before, recently, if selling opportunities don't tempt sellers … Then the market will simply get pushed higher again.

Remember, a trend is in force until it's reversed.  The broad equity indices are still behaving remarkably well. It could be a meaningful sign, or it could simply be a sign that there's a lot of money on the sidelines or in other markets.

For example, last week was anything but orderly in the silver market.

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