The volatility certainly increased last week as Thursday’s decline was the largest in several months. The decline was consistent with the divergences in many of the daily technical studies that have been recently observed.
Combined with the high bullish sentiment of financial newsletter writers and TV pundits—made me conclude last week that a more defensive posture was warranted. During the next few weeks, the technical readings should provide us a clearer picture of whether we will see a deeper market correction.
