My prediction that $SPX 1220 would act as support was wrong. The support seems to be coming at 1200. The "buy the rumor, sell the news" philosophy seems to have showed up this week following the QE2 announcement. I'm having trouble doing unbiased technical analysis of this market. All of my vested interests want the market to continue its ride upwards. Setting this aside, the market could be in one of two situations right now.
1. This is a much-needed consolidation. The spring uptrend had fewer of these, and was a much less healthy up move. This then resulted in a sharp move downward at the end of spring. This run-up has had a lot more consolidation on a daily basis, and this could mean that it will last longer. Also in consideration is the big reverse head-and-shoulders pattern of this summer. That would have projected the market topping around 1240. Usually when an uptrend ends, fear is in the air. Although reasons are being attributed to this week's 2% decline, I don't smell fear. There aren't breaking headlines like there were this spring over the European debt crisis.
On Monday morning, the market moves up strongly, ignoring the various fears that plagued the market this week. Optimism is resumed, and my holdings regain the money the lost on Friday.
In this case, I maintain all my long positions at least for a few more weeks.
2. This is the beginning of the end for this run-up. After a 16% move, the major indices are exhausted. They test new highs above this spring's, and can't maintain them. The S&P 500 gaps lower Monday morning, and moves down in excess of 1% for the day. This defies the hourly stochastics, and breaks through support at the 13-day EMA. There is some bit of news pre-open on Monday morning that ignites this sell-off.
In this case, I immediately exit my position in CTRP, and hold my other two long positions in MFA and GMXR.
As much as I hate to not have answers, I've narrowed it down to two possibilities.
Long MFA, CTRP, GMXR