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Several bullish attempts to break through last Friday’s close of 1,148 were rebuffed yesterday during a seesaw trading session. It may very well be an indication that upward momentum is either slowing or that this “Labor Day rally” is coming to an end.

Of course, these days you can never be sure as the markets seem to ignore bad news and see only positives in this economic wonderland. I am not sure if the fact that the Fed has announced that QE-2 (Quantitative Easing) is lurking in the background, and will be activated should the need arise, may be sufficient to keep any downside slide limited in scope.

As the above chart by MarketWatch.com shows, last hour buying kept the losses manageable, a phenomenon we have witnessed quite frequently lately. Continuing its relentless upward march was gold, which again hit a new closing high of $1,310. The dollar slipped and interest rates were lower.

Now that it appears that the markets have finally conquered the bad omen of the month of September, barring of course any unexpected events on the last trading day, we are now facing October, which has a similar evil historical record as a bull market killer.

I doubt that the bulls will be able to pull another rabbit out of the hat; however, only time will tell whether this month’s rebound off the lows still has legs. Watch for any trend reversals and be sure to track your trailing sell stops.

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