A Poor Opening

 | Jul 18, 2011 | 12:24 PM EDT
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It is never a good sign when the Monday morning dip-buyers are slapped back down so quickly. We had a brief bounce attempt after the gap-down open, but the buyers couldn't muster much, and now the S&P 500 is struggling to stay above last week's lows.

Breadth is very poor at close to four losers for each gainer, and to add to the negative picture, the leading sectors are gold and silver. Everything else is acting poorly out of the gate except for Apple (AAPL) and Google (GOOG), which are helping to cover up a little of the weakness.

There is no question what the problem is. The news flow is just plain ugly. We not only have the debt issues in both Europe and U.S. but Goldman Sachs was out with an economic report on Friday in which it cut its growth forecasts and stated that a double-dip recession is "clearly a possibility." Market players need a reason to buy, and they just aren't seeing one so far.

I flipped a few things I've mentioned lately such as Taomee Holdings (TAOM), Raptor Pharmaceuticals (RPTP), Sify Technologies (SIFY) and Rediff.com (REDF) into early strength and am hanging back as I watch for things to develop. I did start a small position in Magma Design Automation (LAVA), but this market is acting so poorly right now that I'm focused on defense rather than buys.



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