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Even a Dead Cat Will Bounce if it's Dropped From High Enough

FILL IN THE BLANKS

In the newly-released biopic, Miles Ahead, a reporter is attempting to get some background on the life of Miles Davis (played by Don Cheadle) to which the legendary musician gives a brief and curt response.  When the reporter asks for more detail, Davis replies, 'fill in the blanks.'  The portrayal of Davis is only a misrepresentation in its altruism, even John Coltrane described him as being "kind of a prick."

In that same vein (but hopefully more cordial), here's a description of the market's move for the past four days... Equity indices retraced some of their recent losses in what appears to be a technical correction.

I recently wrote about the formation of a technical pattern I call the fill gap:

http://tancockstradingblog.blogspot.com/2016/01/revisited-trading-in-high-volatility.html

The moves of the S&P over the last four days would suggest that the index is now in this pattern.


On low volume, the S&P has retraced to its 50 day moving average and subsequently moved lower.  The gap between the 20 and 50 day moving averages is converging suggesting that this could be a consolidation range.

Outside of the technical factors currently working against the market, global economic factors continue to show signs of growing weakness and the a new set of political factors - namely, the passing of Associate Supreme Court Justice, Antonin Scalia - are only contributing to an uncertain environment... typically, not something the market embraces.

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