Can It Last?

 | Aug 31, 2011 | 4:32 PM EDT
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The bulls managed further upside this morning on mediocre but better-than-expected economic reports, but a few cracks appeared mid-morning and we trended down the rest of the day.

We had decent breadth and the indices closed green, but the action under the surface didn't feel very positive. There were a few big reversals in names that have led recently -- Apple (AAPL), Hansen Natural (HANS), Baidu (BIDU), Coffee Holding (JVA) -- and plenty of stocks closed well off their intraday highs. Of course, the computers kicked in again in the final hour and spiked us up, but the sellers gained a foothold in the afternoon.

The problems the market face are the same ones at the close yesterday. We are extended on low volume and running into overhead resistance. We've had a good run and the bulls want to keep pushing, but with the month coming to an end and good recent profits, there are folks who will be looking to cash out.

I don't want to be overly negative here as there is some support around the 1200-1205 level. A little backing and filling here would be very helpful in creating good entry points. I don't see a whole lot to be excited about on the long side, but that could change fast if we shake out some overexcited bulls.

It was an odd mix today, and if you are struggling to sort it out, you aren't alone. Just stay patient and observant and the trades will eventually come to you.

Have a good evening. I'll see you tomorrow.

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