Graceful Exit Needed

All those who bought in the wake of the Fed decision not to taper are now trapped. The best that can happen it that the market gives them a graceful exit. It often does. Whether they take it is the question.

A graceful exit would see the market bounce to around the 1710-1722 area. Some might get out and reassess. Some might think phew, it's going back up.

Some might scale out of their longs and get short. That would be me for the time being. The stop will be 1729.86, the all-time high.

There are other scenarios remaining that project higher highs which should be respected. But the market may have a little more to the downside.

Regardless of whether new highs do materialize, the market action of late suggests rally fatigue. A partial retracement of the Fed rally would have been bullish. A false breakout sends other signals. Not all of them so graceful.