The BIG story from last week is that stocks broke support in a BIG way, falling below the trendline that has supported them since this rally started in late August ?10. Indeed, it looks as though we not only broke below this line but have since rallied to retest it: a classic pattern during corrections.
The big issue right now is if stocks can reclaim this line, or if they?re rejected at it (indicating former support is now resistance). Another way of putting this is whether or not the Fed has the power to push the market into yet another ramp job.
In plain terms, the entire market rally since the March 2009 lows has been fueled by rampant liquidity and little else. EVERY time the market came close to breaking down, the Fed ramped up the money printing and stocks exploded higher again.
The Fed is trying this same
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