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By Lawrence G. McMillan

Stocks are trying to make sense of the election results, the newly bad news out of Europe, and the potentially foreboding “fiscal cliff.” This resulted in some very volatile action in the market Wednesday — especially if one also includes the overnight session in the S&P futures last night.

Last week , in the Market Insight section, we pointed out that volatility is generally elevated after a Presidential election and stays elevated through most of November. That remains true, but we certainly didn’t expect this much volatility in a single day.

The Standard & Poors 500 Index ($SPX) has not been able to regain the 1,430 level, expect briefly intraday, since it broke down in late October. Twice this past week, SPX tried to rally through 1,430, but couldn’t hold those prices through to any closing. Meanwhile, today, SPX reversed sharply downward and probed through the bottom end of the recent 1,395-1,430 trading range. Just as a close above 1,430 would have been bullish, a close below 1,395 would be bearish. Today, SPX closed a few pennies below 1,395 — not enough to declare an all-out sell signal, but a very dire warning at the least...

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