This was a week when an oversold market became more oversold into month end. There had being a lot of focus late in the week on the budget deal but perhaps not enough attention is paid to the downshifting economy and also the European debt crisis as borrowing cost and CDS set new highs.
With uncertainty overhanging, we closed weak every day this week as folks didn’t want the risk of after hour bad news. We finally have the put buying picking up so that should help the bulls if we get a deal outlined this weekend. Most indicators are stretched to the downside but the TRIN and large cap technology stocks have not shown the same degree of panic. It would be crazy to imagine more down side can come out of this and further down side Monday will probably just invite the dip buyers who want to pick off another reversal like today. However, I have read a lot of long calls off this 5 day drop and can everyone be right?