The dip-buyers are providing support, but they lack juice so far and aren't bouncing us very hard. Breadth isn't too bad at around 1900 gainers to 3000 losers, but most major sectors are in the red. Retail and drugs are showing some relative strength, and precious metals are struggling again on a strong dollar.
Big-cap names like Apple (AAPL), IBM (IBM) and Priceline (PCLN) continue to hold up, but there isn't much chasing. The action has the feel of increased caution but everyone is aware of how consistently we have bounced back from poor opens.
The key is to watch the early lows. Selling accelerates when bounces fail and we make new intraday lows. The dip-buyers will start flipping faster and faster, which keeps the upside contained, and keep stops very tight, which causes additional downside pressure to kick in quickly if we don't gain traction.
So far, I'm a net seller. I see little I want to buy at this point. My stock of the week, Procera Networks (PKT), is off to a good start but it's thin and choppy and needs a better market to gain momentum.
I want to see how well we hold these bounces before being more active. My inclination is to play failed bounces with some index shorts, but I'll be averaging in slowly.
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