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1196… The Number of the Beast

|Includes: DIA, IWM, QQQ, SPDR S&P 500 Trust ETF (SPY)

Well, actually, its 1196.50 on the SPX and it is the 200-day moving average that the SPX bumped up against today and promptly traded off from after reaching it in the morning.  It is this number that we predicted the market would actually get to and that it would also be the top of the market in the near-term.  This prediction was made a few weeks ago as the 200-day moved into doable range and we had what appeared to be an unstoppable rally in stocks.  It all seemed to make sense.  We were definitely going to get to that number so the market which at the time was probably around 1150-1160 had a lot more room to run so you could comfortably buy stocks.  Well, now that we have reached that number and we sold off, what do we do now.  Especially in light of the fact that the market will likely sell on the news after the Nov 2-3 FOMC meeting results are released at 2:15pm on Nov 3rd.  Do we test it again?  Do we go lower now that we have already tested it?  I think we test it again at some point this week.  However, we will have a beast of a time getting over that number but if we do in a decided way, the devil will have been vanquished and the market will likely move quite a bit higher.

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