Once again, the bulls managed a bounce late in the day, but it was very small and certainly didn't have the vigor of other such last-minute runs. Breadth was extremely poor, the point loss was significant and there were no safe havens or pockets of momentum today. I saw a few things recover a bit as the day wound down but there was no rush to catch the dip today.
The last time the dip-buyers were so weak was a month ago on May 12 and May 13. We find some support very soon thereafter and pockets of momentum quickly resumed. I suspect a lot of folks are looking for that to happen again and although there was some very severe selling it didn't have a panicky feel to it.
We have had too much momentum for too long, so on a day like this the action is driven more by a lack of buyers than by aggressive sellers. We did fall back below 925 on the S&P 500, but didn't breach it with any real conviction. It is still trading range-type action and the big picture hasn't changed much. We still have substantial underlying support but the indices aren't going anywhere.
My main focus is the pockets of momentum action. There have been some very strong ones lately but they completely dried up today. Back in May they came back to life after a two-day rest and hopefully we'll see that again. We are being tested and we haven't failed yet, but it is not the time to be undisciplined with your trading...
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