After this morning’s buy the dip knee jerk reaction, for the first time in a long while some dip buyers find themselves underwater. Until a pattern breaks, traders will repeat it indefinitely – the fad since QE2 was hinted was buy every dip. What has changed nowadays is these patterns don’t reverse for a very long time. Aside from some trouble in November due to Ireland, this has been the only trade in the market.
Still nowhere near the 20 day moving average – much like a month ago when I mentioned this was my line in the sand, we are nearing it close to the end of the month. But with the first of the day month effect almost always leading to big up days, that was reversed quickly and it’s been non stop upside since.