UPDATE: I should have mentioned that the S&P had actually gone below the 50-day moving average today with the low so far at 1,100.66. For the purposes of the post it will be the close that matters.
The Index is currently at 1113.13. Come on lucky thirteen. The close on May 6 ("flash crash") was 1,128.15.
I'm thinking about getting long right here, in a highly leveraged sort of way. "Hello, Mr. Banker?"
From Bespoke Investment Group:
For the last ten trading days, the S&P 500 has been playing a game of Pong between its 50 and 200-day moving averages (DMA). After breaking and closing below the 50-DMA on May 5th, the index made a bee line for its 200-DMA before bouncing. That rally was stopped dead in its tracks at the 50-DMA, and now once again the index finds itself testing the 200-DMA. It would be one thing if the 'bouncing around' was within a range of a couple of percentage points but with a current spread of over 6% between the 50 and 200-DMA, the volatility is a bit stressful for investors.
And from Market Folly:
Jeff Saut, Chief Investment Strategist over at Raymond James, thinks the market is in the middle of a bottoming process. In his latest market commentary, he mentions that the market's 'convalescing period' could take anywhere from two to eight weeks. He is looking to accumulate stocks during this period and has advised to ready your 'buy list' of preferred names you want to own. In the weeks leading up to the pullback, Saut had advocated caution and raised cash levels. The market initially declined recently from the flash crash and then rallied sharply back but did not breach the 50 day moving average. As such, he thinks a re-test of the recent low is in order and he anticipates it will hold....MORE including Saut's RJ commentary