Line Dancing

It's not in the words that you told me
It's not in the way you say you're mine
--Toto

Was surprised at the heavy feel of the tape this past Friday. Yes, there were some less-than-expected earnings reports, but the market had been shaking those reports off earlier in the week.

After a couple of up days, seemed like we could be off to the races. Instead, markets opened slightly lower and then weakened further. Even the requisite late afternoon bounce that has frequently erased earlier losses couldn't stick, and prices closed near the lows.

This leaves leaves the SPX at an interesting juncture. The index closed on its 50 day moving average and on the uptrend line marked from the early June lows. We have also been marking slightly lower highs and lower lows since the post Fed QE-infinity announcement in September. Daily stochastics are nowhere near oversold, suggesting 'potential energy' for downside movement.

Perhaps Friday was just an options expiration anomoly. The technical tea leaves suggests the upcoming week could be interesting.

position in SPX