The chicken or the egg? The chicken of course. Actually two chickens.

But what I am talking about with the question is: Which comes first - the end of selling or the beginning of buying? One of the reasons that I was not convinced yesterday was the start of a rally was that I do not believe that a move higher can really begin until there is a meaningful end to selling pressure. Last Friday was a painful episode of selling and it was accelerating into the close. IBM’s preannouncement prior to Monday’s open may have brought on some buying, but it was not preceded by a decline in the power of sellers.

The moral of this portfolio management story is that any rally that begins before selling has slowed will probably not last for long.