WHIPSAW 650 Point Market Reversal

After a strong opening that saw the Dow Jones Industrial Average climb nearly 450 points, the market reversed itself, with the Dow closing down 205 points for an intraday swing of 647 points.

Welcome to the world of Federal Reserve stability.

The morning rally didn't fool me. In today's EPJ Daily Alert, I wrote:

[T]he slowdown [in money supply growth] was deep enough and long enough that we could see significant downside action in the stock market from here...

Traders should continue to short strength..

Goldman Scahs thinks the S&P 500 is headed for an 11% rebound
It's hard to understand how they reached this conclusion, but it is possible this call will add more buying to the current rebound. Aggressive traders should short the move...

Conservative investors should continue to maintain very high cash levels.

   -RW