Ugly Tape

After trading up nearly 1% in the morning, the major markets have tumbled in afternoon trading.  This type of action, when the market trades sharply down even though economic reports and earnings reports both beat estimates handily, is not good.  There's simply no way to sugercoat it.  Since the start of the pullback, earnings and economic numbers have remained strong, so the market is signalling that the indices got ahead of themselves based on what's in store for earnings and the economy in the future.  The long-term uptrend is also getting very close to breaking down.  If the uptrend breaks, investors will need to reposition their portfolios, which ultimately puts even more pressure on share prices.  At any point, something can spark the market back to the upside, but for now, the short-term trend is down.

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