Nowhere to Hide

 | Nov 23, 2011 | 10:41 AM EST  | Comments
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We are into our sixth straight day of selling now and once again there is no sign of a bounce. The selling has slowed a few times during this long collapse, but we have not had one decent oversold bounce. It has just been steady pressure the entire time, and that has probably scared away more potential buyers than anything.

I suspect that one of the reasons we aren't seeing much bounce is that we don't have many shorts who produce upticks when they lock in profits. The bears were badly burned during the straight-up run in October and they were probably gun-shy about loading up in the early part of November when we kept ignoring all the negative news. We are now going straight down and there just aren't enough bears to take gains and pop us back up a little.

Once again it is just dismal out there. Breadth is very poor at 10-to-1 negative on the NYSE and there is nowhere to hide. There are no leaders and no pockets of momentum.

All we can do right now is to wait and see if we find some support. Unfortunately there really isn't any strong technical level right now. The next stop is the lows of the year we hit in early October.

The good news is that some good stocks are becoming much cheaper. That will give us some opportunities when the action improves, but patience is the key right now.

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