That was a bit of a negative reaction to the FED announcement. My how times have changed. Used to be when central banks talked people bought stocks. The breadth was -58%. That was a strong reversal from the +66% reading we had mid day. If the pattern repeats tomorrow will be up. That would also be consistent with reversing whatever happens on FED day. I suspect we still have a date with the 20 SMA before continuing down. If tomorrow should be down then the bounce is probably over.
The futures took another stab at going below the 20 SMA, but found support again. Although the bounce appears to be very weak it is still alive at the moment.
So far western markets have not noticed China crashed down below the Aug. low. There is certainly a risk that we wake up one morning and see western investors have noticed. The current bounce may not be over yet, but I don't see anything to indicate this is the start of a big move up. It looks a lot more like consolidation at the lows in preparation for a break down. As oversold as we were this pattern could easily last a few more days. Be aware a really bad January usually leads to a negative February. Barring a miracle rally this will go down as a bad January.
This is an interesting article. 36 WTF Quotes From The Davos Bubble Chamber Some of the quotes are quite amusing. Others are a little scary if the people actually believe what they said. I guess stupidity knows no bounds even among the rich and famous.
Bob
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