For the fourth straight day, the market was unable to put together a decent bounce. The market was in positive territory most of the day but closed poorly after Fed Chairman Ben Bernanke's speech this afternoon didn't offer anything new or helpful. The fact that the market acts this poorly after we have already had four days of selling pressure is kind of interesting. This is mini-bear-market-type action, and market players aren't going to bother trying for a bounce if conditions don't improve soon.
What makes this action so challenging is that there is little intensity in either direction. We did have a little pickup in the selling in the last hour today, but we haven't had the sort of panic that really flushes out marginal holders.
There is an old saying that oversold markets can become even more oversold. So far, that is the sort of action we are seeing. At this point, even when we do finally see an oversold bounce, there are going to be a great number of market players looking to exit. We are creating a lot of overhead resistance with action like this, which is going keep bounces contained and short lived.