After the selling last week, the bulls were ready to bounce us a bit today, but they weren't able to gain much traction. We hit the highs at midday but we never were able to generate much energy, and we ended up with a poor close. The dip-buyers just didn't have sufficient conviction, and they bailed out again at the end of the day.
A couple of takeovers and some relative strength in banks were the bright spots, but weakness in key stocks like AAPL, AMZN and NFLX and strength in the dollar kept sentiment negative. Volume was lower, and that was a minor positive, but overall the day had a dead-cat-bounce feel to it.
Failed bounce attempts are what downtrends are made of, and that is what we had today. We are still holding just under 1200 of the S&P 500, but the bulls really need a better showing than this if they are going to drive the bears away.
Tomorrow we have the General Motors offering, which is going to receive a lot of attention. Good action there will help the market mood. We also have the Producer Price Index number in the morning and some earnings reports in the retail sector.
Tops are processes that play out over time, and this one is starting to play out a bit too well. The biggest problem for the bulls will be if they lose QE2 as a driving force. There just aren't a lot of catalysts out there right now, with earnings season over and no major news events on the horizon.