We all WOO for BIDU

The selling continued on Wall St. today with very negative breadth at more than 2-1 on the NAZZ and more than 3-1 on the NYSE. The volume however, was lighter than yesterday which was the only salvation that the Bulls have. Some dip buyers showed up but were overwhelmed by the Bears. As we have identified in previous posts, the sentiment shifted to the Bear camp recently and we should not be too quick to fight it.

However, the selling does seem to be overdone and a more attractive bounce may materialize on Monday. This would be the type of action that we would scrutinize. We will look for leadership in the Small Cap sector. If the leadership continues to favor a narrow list of large caps i.e. MSFT (anyone?) ; we would not feel comfortable playing the bounce in size. The tough part is ignoring a sharp bounce that looks good on points but lousy on internals.

So far we are very underwhelmed by the action in Small Caps which is leading the decline. Should this continue on Monday the risk greatly increases for the market to start falling precipitously. And Heaven For Bid MSFT were to start feeling pressure late in the decline. If such a scenario were to develop, this could take the NAZZ down to the 2100 level. However, this is exactly the type of fear we would be hoping for which would present huge buying opportunities for a powerful rally that could last for the rest of the year.

If You Held A Taser To Our Head: BIDU (the Chinese Google) up 360% today will make new highs sometime intraday on Monday. The disbelief of investors combined with the eloquence of the CEO and more futile attempts by the Shorts should create more "Deer in the Headlight" facial expressions.

-Have a nice weekend-

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