A lot of long term funds (mutual, pension trust, etc.) do not trade technicals. In fact, most of them don't. So, the key factor to buy, for them, is that people add cash to these funds. And, to sell, is mostly because of people switching portfolio from equity to money market, and worst, to their bank account in cash. If there is no deal today, most people will be so fearful they would call in to switch from equity to cash before market close. That is something this market cannot handle ... Edit: An example. $1 billion fund with 95% fully invested into index components. Receiving 5% request to switch to money market. = 95% x 5% x $1 billion = $47.5 mil worth of stocks to sell on close or on next trading day.
lawerance were you saying earlier if the baill failed we will go lower than 1080, or that even if we pass the bailout and if es doesnt close the week at the top range of the week we will still go lower than 1080 next week?
It is weekly formation issue ... B1S2 can fill in here Normal bottoming is a long term process, the market may drift lower before it heads much higher. If there is a bailout, it is no longer normal.
The House will pas the Bill and the market will rally strongly. This will become more evident in the next 3 hours. No point in playing hero by bucking the trend - trade with the market, make money, and discuss politics at the bar. Next week will be resumption of downward trend.