There is an old saying that strong markets tend to close strong and weak markets close weak. There isn't any doubt which sort of market this is. Although the Nasdaq and small caps struggled, things weren't looking that bad until the final couple of hours of trading. The buyers couldn't get anything going, and by the finish, Nasdaq's breadth showed only 450 advancers to 2,225 decliners.
The action today was a particularly good example of something I've said in the past, which is that bad markets wear you out rather than scare you out. There wasn't any panic or washout action today. It was just a steady grind lower all day, with the dip buyers and bottom callers serving as a toothsome meal for the bears. It is the type of action that makes the bulls give up out of disgust rather than fear.
This market is ill and it is going to take some time to recover. We may see some bounces soon, as we are quite oversold, but the bears are now firmly in control of this market and we have to respect that fact.
Stay tough. The opportunities are already here - C below $3.70 and MTG below $7.50 are screaming, table-pounding examples of buys - and we just have to be patient and get some resolutions.
long C; long MTG
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