More Struggles Today

For the third day in a row, the bulls were unable to gun us higher into the close. That is one of the characteristics of the market that has changed since we started to downtrend a few weeks ago. We just aren't seeing as many strong closes as we did during last year's uptrend.

The lack of strong closes is a subset of the general problem of much less aggressive dip buying. We have had oversold conditions and good excuses for some buying, but we aren't suddenly ripping higher like we did so often a few months back. The buyers no longer seem to be worried that they are going to be left behind as the market flies higher.

Overall, it was a slightly negative day. We ended up with about even breadth, but the only sector that did much was banks. Banks have been the biggest laggard lately, so they were probably due for a bit of a dead-cat bounce. Overall, the sector still looks very poor technically, but for long-term holdings I'd buy some bargains now - like GS, JPM, WFC.

The big picture still looks troublesome. We are oversold and we are struggling to bounce, but we aren't doing a very good job of it. I'm looking for the bulls to continue to press and probably produce some more upside, but they may be turned back as they confront overhead, especially around 1100 on the S&P500.

If you are playing long, stay selective and keep those stops tight. Don't let a trade turn into a long-term investment....