Reality Hits...

The Dow made its first significant retreat today since this relief rally begun, retreating over 85 points after hitting 7500. So, has reality hit investors at last with leading indicators pointing towards continued weakness in the next 6 months to come (see economic calendar)? In fact, I have mentioned that this relief rally can go as high as 7500 before coming back down and it seems like it is being realized right now. Problem is, tomorrow is a Quadruple Witching day, a day of extreme volatility and a day where the big players with their algorithm trading machines make millions of trades with billions of dollars throughout the day in order to reap the kind of arbitrage profit that nobody outside their circle may make. This is the day for seasoned day traders and a day for swing traders and other traders to have an early weekend. We need to see the Dow follow up on the correction tomorrow by closing down significantly in order to call the end of the relief rally. If the Dow should somehow break the 7500 point level with a big up day, then a reassessment of what is really going on will be needed. For now, the Dow is in a short term uptrend, and intermediate/primary bear trend.