The action today was a classic low-volume bounce. We recouped just a bit of the losses from last week, and there wasn't much energy behind the action. Oil, commodities and weak dollar plays led, but those have been the groups that have suffered the most lately. Technology, chips and homebuilders also bounced a little, but it was nothing very impressive.
The technical pattern of the major indices suggests more downside is coming, and that is confirmed by the lack of any notable leadership. We have had some strength in regional banks, but other than that, there is no group or sector enticing buyers at this point. Some of the hot-money sectors from a few weeks ago, such as China and solar energy, have completely collapsed. Until we have some new leadership for the bulls to be excited about, it is going to be impossible for this market to do much to the upside.
The Apple report tonight is certain to be upbeat and positive, but so far this earnings season the best reports have been sold. AAPL, of course, is in a unique situation, but this is a market with people looking for exits. Even if Apple does well, I don't think it's going to be able to lift the broader market.....
long AAPL
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