Distribution Selling
The Fed decision delivered the 'sell the news' action, while Friday followed through on this reversal. With earlier consolidation breakouts now fading to 'bull traps' the scene is set for further selling in the early part of next week. On the flip side, a retest of August lows could offer a nice long set up which could merge with a 'Santa Rally' later in the year. If bulls are to recover last week's breakout, they will need a good show of strength tomorrow. Friday's distribution in the S&P was comparable to that delivered in August. The move came with a 'sell' trigger for On-Balance-Volume. But all of this is building on the relative underperformance of the S&P to the Russell 2000 dating back to the end of August.