Backstop Program Successful for a While
The support program that we suspected would be put in place at 1316 on the S&P worked for a few days. Now the test will come. Our most longterm computer programs turned bearish on 5/16/11 at 1317 on the S&P. These are the programs that stayed bullish through the whole QE2 period since last September 2010. The last couple of trading days saw what I would call the hook bounce, where the S&P rallied 30 points and set the hook. Now we are headed lower over the next nine months.