The quick reversal of Apple (AAPL) and the investment by Warren Buffett in Bank of America (BAC) had the bulls feeling good to start the day, but the technical conditions just aren't very supportive of further upside. We have already had a decent bounce over the last two days, and once we came close to filling the gaps on the charts from last week, the resistance picked up substantially.
The news out of Europe about extensions of short-selling bans may help to prevent some downside pressure, but it sure doesn't inspire much confidence. It does nothing to solve the much deeper problems that are giving the short-sellers the ammunition in the first place.
As far as I'm concerned, the biggest problem for this market right now is that there is just no leadership at all. The only group that is even close to having any sort of upside momentum is the gold-mining group, but the over anxious bulls had to pay a price for their chasing yesterday.
I'm going to keep the miners high on my radar, but there is risk in the group tomorrow on Ben Bernanke's comments. They should be good trade vehicles in the short term, and in the longer term I don't think the run is even close to a top. Richmont Mines (RIC), Jaguar Mining (JAG), Banro (BAA), AuRico Gold (AUQ) and Endeavour Silver (EXK) are a few on my watch list.
Small caps in general look horrendous, but you have to wonder about the values that are developing. I'm definitely not a value investor, but I like to watch stocks I consider cheap, to see if they can form a bottom. I'm seeing renewed selling pressure today, and so far there aren't many signs that the pressure is coming to end. I'll discuss some specific names soon so we can track them.
