Stock Market may Pop and Drop

The stock market accomplished its job perfectly today; nobody was happy. The Bulls are nervous that the internals were not overly impressive despite the solid performance in Semiconductors. Just when the market looked like it was going to blast off, it fizzled. Even though the volume was heavy and breadth was slightly positive the Bulls sense that the market is living on borrowed time.

Over in the Den, the Bears experienced another annoying day of a market that refuses to crack. They just know that danger lurks but that "Darn SOX" (no pun intended) keeps hope alive. All in all, the stock market is providing enough confusion and frustration for all participants to feel on edge.

The Biotech Sector is maintaining a bid, most likely due to rotation out of other speculative areas. When Bullish vibes exist overlaid by significant skepticism, the Biotech sector is often rationalized to provide growth in a non cyclical manner. Traders looking for Macro-Growth plays will often gravitate towards technology stocks. However, speculative long side traders lacking confidence in the economy seek out the beta of the Biotech Industry.

If You Held a Taser to Our Head:
The stubbornness of the market which refuses to decline in the face of many potential concerns is wearing on the Bears. The possibility of a capitulation from frustrated ursine's seems imminent. We would not be surprised to see a pop and drop scenario play out mid this week. The problem with this scenario is that the pop will be light - like diet soda - and the DROP will be heavy - like DEAD!

Risk/reward still unfavorable, be careful out there.

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