Too Early to Buy, Not too Late to Sell, Makes Traders Healthy, Wealthy, & Well.

Overseas markets were positive and Oil and Gold are still looking strong. CPI and Jobless claims were relatively tame which is good for people watching the Fed (let's not forget Katrina regarding the jobless claims). Business inventories came in less than expected signaling caution from CEO's. Keep in mind this bodes well for future rebuilding. NY Empire State Index came in better than expected at 17 versus 15 forecast.

Overall the economic news this morning was not enough to change the downtrend that we are in. The stock market is still not oversold and leadership groups are still M.I.A. We certainly don't view the out-performance of Gold as a healthy market indicator. The only good news is the percentage of Bears is starting to increase according to the Investor Intelligence Poll. The number of Bears now stands around 27%. When this reading climbs to the low to mid 30%'s the sentiment would be considered extreme enough to possibly spark a rally. Whether or not that rally is "THE" rally remains to be seen.

We will be watching the sentiment readings as well as other market internals in order to decide which rallies are playable or of the Dead Cat variety. Most importantly we are getting excited for the potential "Mother of All Rallies" sometime in the Fall.

Play Defense!

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