Classic Consolidation

The Bulls should be very happy with today's action. What started out as DELL-irious downward pressure resulted in nothing more than a "Fed-up" fizzle. If this is the most the Bears can do after the recent run-up then we say…BRING IT ON!

The market technicals look strong and the Big Bad Fed is off our back for a while. Strong seasonality mixed with improving fundamentals will prove too potent for the Bears after they fail in their attempt to bring the market significantly lower. If you are a Bull you should be on your knees praying for a little more consolidation; just enough to give the Bears some false hope. A few more days of action similar to today may be just the trick.

After the bell Sun Microsystems (SUNW) reported essentially okay earnings and Electronic Arts (ERTS) had good guidance. We will be watching these stocks tomorrow to see if they can maintain bids in the face of a little more market consolidation. As always we will be focusing on the Semiconductors and DELL for a little recovery.

If You Held A Taser To Our Head:
The market will still be considered healthy if the Bears bring it down to around NASDAQ 2080. We strongly recommend that traders do not fall victim to the allure of the Bear during the remainder of the consolidation period. The timing of the rally may not kick in exactly as the small pocket of Bulls expect. This would just be enough to frustrate them as well. However, more and more, a very strong up move seems inevitable, especially if slightly delayed.

Hope you did well today. See you tomorrow.

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