SPX -- Daily Chart

Well overdue, the SPX has moved into correction mode. It has violated the uptrend line
running from Nov. '12, and the10 and 25 day moving averages have rolled over. With
the nasty action on both Wed. and Thurs of the past trading week, the SPX has moved
down into a modestly oversold position. Lovely symmetry suggests the SPX would
wipe out the blow off that commenced in late Apr. and roll down to test that final
break out at 1550 or thereabouts. SPX Daily Chart

From a non-technical point of view, there should be a thorough parsing of all that Bennie
said with a bull camp rising to meet the bearish reaction. My take is that Bernanke is
getting strong pushback on QE from other members of the Board and that he has tried
to quell the exuberance seen in both stock and home prices by reminding folks that QE
will end down the road. He seems to be running the gun lap of his tenure as Fed chieftain
and is trying to keep QE going until he leaves while at the same time attempting to cool
QE sensitive asset prices. I suspect that he is also becoming a hot potato for Obama via
back channels by Wall Street especially since the Fed is running the show flat out and not
them. But Bernanke knows his history lessons, too. Ending QE too early over the 1936 -37
period put the economy into a mean recession and led to a vicious 44% downer bear
market in 1937, all of which wrecked nascent confidence that built up post 1934. While he
is there, I suspect he wants to make damn sure to his satisfaction that the economy can
progress well on its own without all the monetary ease it has been getting. Looking
elsewhere in official Washington I am reminded of the title of a Ross Thomas novel:
"All The Fools In Town Are Us."