Wednesday, May 11, 2011

Bad Day For The Bulls

We had a minor bounce in the final few minutes of trading, but it was a very rough day for the bulls. We had weakness across the boards as oil- and commodity-related selling spilled over to just about everything else due to the stronger U.S. dollar.

The bulls lamented that lower oil and commodities are a market positive, which is why retailers showed some relative strength. They are overlooking the fact that the market has been going up on the weak dollar and rising oil and commodities for months. Apparently, that correlation is only supposed to work when it favors the bulls.

Regardless of the reason for the weakness, it left much of the market in very poor technical shape. We are still holding key support levels and a positive report from CSCO is helping after hours.

The biggest negative isn't the major indices but the action in individual stocks. You have oils like NOV and financials like JPM and WFC breaking down and little life in the key momentum names. A few stocks, like AMZN and NFLX are holding up though.

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