Backing and Filling - Setting Up For Some Gains By Thanksgiving?

For the third day in a row, we had a little last-minute buying that took us well off the lows of earlier in the day. Even with that bump, the action today was quite dreary. We were solidly in the red, and breadth was around 4 to 1 negative.

All major sectors except for gold miners were down on the day, with oil and commodity-related names looking the weakest. The dollar was up, which may be part of the problem, but we seem to have been less sensitive to the movement in the greenback in the last couple days.

In the bigger scheme of things, this is only the second day of any significant weakness out of last 14 trading days, and it wasn't a particularly aggressive selloff. Volume was about the same as yesterday, there were few signs of panic, and the vast majority of the selling occurred in the first 30 minutes of trading. I'd call it an "orderly selloff," but I'm not sure that the sanguine attitude is a way to produce a quick low.

Some backing and filling is a healthy thing. In fact, if we had a few more days of this sort of action, it would be a perfect setup for some good upside around the Thanksgiving holiday, which tends to a very positive time of the year. I'd prefer to see the dip-buying cool off for a little longer, but it is hard to keep those folks contained.

I see DELL on the wires after the close with a poor earnings report. That is pushing things back down a bit, but I suspect Dell may be dismissed by some as a company-specific problem rather than an industry issue.

In any event, it looks like we are going to have a bit of rest. Whether it is a pause that refreshes or the foreshadowing of something more dire, we will have to wait to see......