...Hmmmm

A few habits of the market we’ve extensively covered are…dip buyers come in on shallow pullbacks intraday and/but, if there is a big sell off >1.5%,  they always ignore the next day to step back and instead wait for the dust to settle.   We also know shorts waste many opportunities to press fresh positions/ get aggressive the day following a big sell off because they continue to fear upside risk.  Today, we have all these characteristics, which will probably point to a fight tomorrow for the 20MA (1196) and the 1200 level.  Simply, the Bulls shouldn’t feel disappointed we failed to reverse hard and take back the 20ma.  It may come tomorrow.  It is the Bears, despite the sovereign overhang catalyst, who should feel disappointment as their troops stayed in their holes.  

Despite what may seem like heavy selling the past 48hours, it really is not panicked and resembles more of simple month-end profit taking using the Sovereign issue as the excuse.  The little bounce today can be credited to short covering and nothing else as the dip buyers stay sidelined, so really nothing to get excited about either on the Bulls side

A few things need to change for the Bulls.  Firstly, tech has been running on the sell side for a few too many days, plus most recently (noted yesterday), Earnings have taken a backseat (poor reactions to X, DD VECO  etc)  to the Soverign/Gs/Financial reform overhangs.   We need earnings to be driver for this market to go higher.  For the moment,  market has lost that ’ lovin' earnings  feelin'  due to the prominent overhang.   Also, believe or not, if the financial reform debate gets the votes it needs to move on after failing 2 times, it may actually move the market to the upside tomorrow.  Hey, we have a little imagination!.  Speaking of imagination and big money does have it…with all the downgrades of Club Med members,  some are probably betting SP may give the UK a paper cut.   Maybe Paulson is meeting with GS & SP;).. Anyways, this would be a monstrous event if it were to happen.