Analysis:
Today's market rout was all impressive in the sense that it fell through the 1,180-1,185 range and never bounced back. The market action would seem to support the notion that Wall Street institutions conspired to scalp (or shake out) retail investors just as the latter were convinced that the bull market was finally in place. Whatever the theory is, many late bulls no doubt threw in the towel, and the stock market aphorism "buy the rumor, sell the fact" belatedly -- by 13 days -- proves its inevitability like death and tax.
Looking ahead to tomorrow, the CPI excluding food and energy will be flat or negative, drawing buyers into the bond markets and weakening the dollar, and the Housing Starts will hover around the uninspiring 610,000 units. The market will rebound from today's sell-off as investors see values after the froth in the market has been cleaned up in the last few days.
Strategy:
Hold long at 1,197
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