Not time yet!

The Semi's and Small Caps continue to exhibit poor action. Breadth is still lousy and volume is moderate. The key to judging an attractive entry point for the dip buyers is not necessarily when the market hits support levels rather, how the market responds at those particular levels. For example, do the previous leaders have better relative performance or is a rotation to other sectors becoming evident. In other words, it is important the market bounces off of support levels but more important to watch the internals of that bounce.

Today we have seen a tepid attempt from the Bulls to buy the dip. What's clear to us is that the key leadership i.e. Semi's and Small Caps are M.I.A. Therefore you're "friendly neighborhood Kcap Team" refrained from making any purchases.

All-in-all we believe that this pullback has not run its course yet. The next bounce attempt may actually be met with short selling...short selling, what's that, remember how to do that? We'll be watching the tape like a voyeur until its time for us to pounce.

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