Wednesday, August 10, 2011

No follow through, but an inside day

The indices sold off pre-market and started consolidating until early afternoon. Nice breakout (red arrow) and the S&P-futures broke the 1150-level once more, only to lose it again within half an hour. We retested the break out area, which didn't hold. In the last hour we revisited the day's lows and broke them. The market ended there, near Monday's low. Not really constructive action for the bulls, which are really having trouble finding any traction and this time we got Europe to blaim. Now it's the French who are in trouble. Once again it's all about debt, CDS spreads and will X or Y default.

Despite the indices being down today, some of the traditional 'leaders' are acting pretty strong. SINA, MCP, CF, SOHU, LULU, SODA (to name a few) were up in a down market and making good gains when market broke out of the consolidation area. Of course, when the market gave back the gains, so did these stocks, but to a lesser extent. Definitely names you want to keep on your watchlist in case they setup when (and if!!) market shakes off the recent declines.

Gold, silver, oil and treasury bonds all knew big gains. Gold even set a new record, just breaking the 1800-level. A clear indication where the money is going in this sell-off.

With the market printing an inside day, tomorrow might be very exciting. Which ever side we break, up or down, it could very well decide the direction of the market for the next couple of days.

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