Tuesday, May 17, 2011


We were oversold enough for the market to bounce, and eventually did after an early struggle, but it wasn't anything particularly impressive. We still had negative breadth and plenty of red, but some of the high-beta big caps like AAPL, GOOG and BIDU managed to attract some flippers looking for action. They might not stick around for long, but the market looks and feels much better when we have some buying of the most popular names.

Better action in the afternoon took the S&P 500 above its 50-day moving average, but we remain in a very precarious technical position. If we move up to the 1,335 to 1,340 level, you can bet the bears are going to look for a bounce to actually fail. They have had little luck with that thinking in the past two years, but this market does not look very healthy and the chances of another bout of selling look higher than they have in a long time.

Investors looking for their pitch in this market will be fine.

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