More Recharging Needed

The failure to hold the Bin Laden gap up yesterday signaled a tired bull. The Dow Jones Industrial Average finished the day slightly green and the S&P 500 had a minor loss. Momentum names on the Investor's Business Daily's IBD 50 saw a sea of red. Small caps underperformed badly and oil and commodities suffer heavy profit taking.

The end of day bounce felt like the sellers are letting price recover before they hit the sell button again. The action in silver and technology momentum names today shows what can happen when everyone wants to sell into thin volume either due to margin calls or profit taking. That said SLV is getting interesting approaching the lower bollinger band around $37-$38. Big cap stocks like AA, WMT, AAPL and INTC held on much better today. It would be interesting to see “the technology of the year” INTC will be unveiling tomorrow at 9:30 am PST.

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