Apparently stress test results have been "leaked" to the Turner Network radio and they are very bad which is why futures are indicating a big gap down. Aparently however, this report is in error and is being pulled. This sort of headline risk has made it difficult for anyone to hold overnight positions.
Regardless of this, rarely have I seen a big gap down mark the end of an uptrend, unless it gets filled quickly intraday. Gap downs during uptrends indicate "wall of worry" type action. They can be scary though if you are long. This is the opposite of what the shorts experienced last year. There was so many times when the market would open up big during the downtrend to test the mettle of the bears. Those gap ups indicated "slope of hope" behavior.
But as I said in the prior 2 posts, markets are ST overbought and compressed therefore, weakness to relieve this compession is not suprising in the least. If the rally is over and market action indicates we will rollover into an oblivion, I have no qualms with changing my view and riding with the bears and if that means missing the first 20-40% of the downside so be it....better to ride the market with the wind at your back.
If I see too much eagerness to buy the pullback then perhaps the bears may be back in the saddle for a while. I'll be watching like a hawk.
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