Once again, strength in the dollar prevented the market from putting together a strong oversold bounce. The day started off nicely on "better-than-expected" jobs news but talk about an emergency meeting in Europe about Greek debt put pressure on the euro and pushed up the dollar. The stronger dollar slowed down the bounce attempts in oil, metals and commodities and that kept things contained.
The good news was that we saw 2-to-1 positive breadth and many of the stocks that broke down this week did come back a little. However, the bad news is that it was a pretty routine oversold bounce -- and not a particularly strong one at that. Many charts are still busted and the risk that they could roll over again is high.
Overall, even after an ugly week, the indices are only a minor amount off of recent highs. The average momentum and commodity stock suffered much more but it was not a total collapse. It is very unusual for the market to go straight down after making a high. Normally, a market that has been uptrending for a while has a supply of dip-buyers who provide support during pullbacks. There are usually a series of bounces and failures before we see a real major change in the trend.
The biggest problem this market faces right now is that the leadership has been pretty much destroyed.