Tough Love for the market

If you read cbsmarketwatch today, you will find a lot of explainations as why market lost more than 1% today.  It is the Bernanke to blame, or, after three up days, the market is suspectable to the profit taking. All makes sense, and all probably has contributed, to some degree, the decline of the market. But the most important reason, IMHO, is the technical trades by some big traders.

The major market indexes touched 20 day MA yesterday. it is a critical point if the market wants to go higher from here. the last time this happend was a week ago, and we know what happened.  It basically showed that the market faces a lot of overhead resistance around 20 day MA, and today's timely failure of the market's breaking that resistance further confirmed the technical significance of 20 day MA.  and I suspect many trading program has closely monitored those major indexes when they apporched close to the 20 day MA.

GLD is just opposite, it get a lot of support at its 20 day MA, as a matter of fact, it has not violated 20 day MA ever since Dec. 24.   Yesterday, it briefly traded below that line but quickly bounced up.

Will Bond save you from the market turmoil, it all depends, if you look at TLT, I actually think it becomes a short candidate.

Obviously, the commodities have enjoyed some health run lately, and based on today's big reverse from yesterday, its run to new high may not end soon.

Chinese stock has not been out of wood yet, I blame myself not able to short "BIDU" at the closing, today's volatility and "high open, low close" should attract more short sellers.

As we have cautioned ever since the beginnig of the week, time to be vigilent (both sides :), not only the downside). it is a critical moment of the market, if market can not stage a strong come back tomorrow, our hope for a short term rebound dimmed.   Based on that tomorrow is an option expiration day and Monday is a holiday, I do not hold my hope high.