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SPIKE of short term trading index

Following the significant equity market consolidation or profit taking in Asian markets overnight, the stocks in the states were under enormous pressures from the opening bell in the morning. The declines were broad based and no safe place to hide (only two stocks of S & P 500 index ended in positive territory). However, the sell-off was due to happen considering the historical magnitude of rallies we have witnessed in the last week (>17% in 5 sessions) and potential huge amount tax related portfolio balancing at the year end. Any opportunities to book meaningful gain or any any sign of momentum shift would trigger consolidations. Today's movement is no exception, the broad based indexes steadily went to downward throughout morning session (we can see the ARMS gradually reach the usual upper limit of 2.0, then the index suddenly spiked right over 6.0 around 2:45. After this momentum shift the market went to unstoppable downward spiral. Because of the way that ARMS constructed, we might speculate that it is quite likely somebody or some "big guns" were exiting huge positions real fast willingly or unwillingly.



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