A Deflating Day

The bulls, or perhaps I should say the traders, tried to gun things up again in the final hour but fizzled out as the clock wound down. Last-hour strength has been such a consistent pattern lately that the intraday flippers were going to make it self-fulfilling for at least a little while. The problem was that it has become too obvious and they rushed to lock in profits before the close.

Except for the last-hour bounce attempt, it was poor action all day as anxiety over missing out on last weeks rally is disappearing. The dip buyers are not feeling the same rush to jump on a pullback and we even have some folks starting to wonder if maybe the market won't go straight up from here. The skeptics have become a bit more vocal now and the folks calling for a new bull market a bit more reticent.

Technically we are still in pretty good shape. We are pulling back to where we were prior to the frenzy last Thursday on the G-20 meeting and mark-to-market accounting change, which isn't too bad in the context of the move off the March lows. We still have underlying support and the bigger picture is setting up pretty well going into earnings season next week.

Many stated that we needed to consolidate the move off the March low to set up charts better. We certainly are seeing some profit-taking and if the "Wall of Worry" builds a bit at this point we should see some upside triggered by earnings reports.