Looking Back, Looking Ahead

The broad market continues its downtrend. The VIX has yet to spike, financial turmoil continues, crude pushes higher, rallies are sold and lukewarm days tend to drift to the downside. Also, I think the argument that the S&P-- now just barely into bear market territory (20% decline from peak)-- might have more to go based on past bear markets performance has some credibility. The current housing decline is worse than the great depression and it has spread rapidly across the entire banking system making this seem like at least an average bear.

Also, bottom pickers are feeling the pain as Freddie, Fannie, and the rest of the banks get hammered. Financials are dangerous here and should only be short term trades. Anyone taking big positions in these names are essentially putting a loaded gun to their head. However, their movements as well as crudes can continue to be used as a market tell.

I've been impressed by the action in BRCM, LO (announced $400 million buyback Wed night), PLCE and gold. I'm thinking about taking a shot at ESLR as well for a quick spike. I also think its interesting to see ARRS bounce after gapping down significantly. I'm watching for that sucker to get to its 200 sma after filling the gap and then shorting it down (of course depending on the action).

RIMM has been a bit of a disappointment as it fell through its 200 sma and has had terrible relative strength. AAPL is much better at this point and looks like its worth a trade if it pulls back to the 200 sma again. Ipods, Itunes, and Iphone are essentials to a large part of the population now, as much as bread and water are (maybe not that much). Furthermore, macs are becoming the preferred computer of choice for kids going off to college and a major migration of frustrated PC users to the much more flexible OS X system continues to occur.

Wednesday's a day that could really move the market. Bernakes gonna be talking for a long time which could spell disaster. The Fed minutes from the June meeting are also going to be coming out.