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The latest euro rumor is to get around the nasty rules it has to deal with the ECB could lend to the IMF, who could then lend to European countries directly -- or I suppose buy their bonds at issuance. Usually this sort of rumor would drive the market up 2%-3%, so either like a drug that is losing its effect, the rumors are getting tiring, or the fact it is so out from left field -- we are not seeing any upward movement from the latest floated "solution."

Looking at the S&P 500, we are once again at key supports, having just broken below the 200-day moving average and sitting at the 100 day. The 100 day has actually been more of the support level the past few weeks, but since mid-October, when we broke back above key resistance levels, strangely the 50-day moving average has been the most important level (blue line). We have not fallen below that one even once, while we have seen both the 100 and 200 day breached briefly. Kind of strange, because that's not normally the way it works.

As highlighted earlier this week, we have a series of "lower highs" forming, which is traditionally bearish. I use the word "traditionally" because a lot of things that used to mean something, mean less in the market of the past three years. Volume this week has also been nowhere to be found. I assume a lot of people are simply not playing with the binary events happening in Europe, and the fact we now gap up or down 1%-2% three out of five days a week. Too difficult.

Update: Actually in the time it took for me to write this, we broke the 100-day moving average and are sitting at S&P 1,226, which is right above the 50-day moving average of 1,224 range. If the 50-day breaks, that would be the first penetration of that level in about 6 weeks.

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Source: The S&P 500 Tests Support Again Thursday