The S and P 500 futures are trading aggressively lower overnight. The big question becomes: will they rebound again from the 50-day moving average? Or do the powers-that-be have something else in store?
From 1846.5 to the 100-day moving average, currently at 1762.13, represents a 4.6% correction; to correct to the 240-day moving average would take the market down nearly 9.5%– close to the fabled 10% correction.
Without an obvious catalyst, it difficult to see the market selling off. However, I can imagine one very obvious but seldom mentioned reason: To have a terrific 2014, fund managers would rather see the market sell off early in the year and ride it up like champs for the remainder. We haven’t seen the 240-day moving average touched since December 31, 2012. Is it a coincidence that the year that followed was truly exceptional?