After the hopeful action yesterday, today was very disappointing. Not only was there a lack of follow-through, but there were almost total reversals of just about everything. The financials didn't completely reverse, but they gave up a hefty chunk of their gains, which is good news compared to most other sectors of the market.
Breadth was around 4 to 1 negative, and the only sector to the upside was gold. The good news was that volume was quite light but that isn't anything to be too excited about.
The "bad bank" surprise yesterday provided a brief respite for the bulls, but today reality intruded and we had steady selling all day.
So now what? We are back in no-man's land for now, but we do have pretty clear parameters for downside support and upside resistance. The S&P 500 is now in a range with a top of about 875 and a bottom of a little over 800. I suspect we will have a bit more downside from here, but will look for the bulls to make a stand before we breach the annual lows. Keep an eye on gold. That is looking like the best sector at the moment.
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