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Wednesday, May 9, 2012

Stocks bounce as expected

As I stated this morning when I made my previous post at the market lows for the session, stocks were likely to bounce from the 1,340 level.  We got down around 1,343 at the low, which is where we were when I made this morning's post, and we have now bounced to almost even for the day.  The S&P 500, which was down around 20 points at the low, is now off only about 1 point.  Investors are still convinced that any dip is a buying opportunity, but beware, the big picture shows some serious technical damage has been done.  Not only has the S&P 500 rolled over, but the leading sectors, and especially technology are also compromised and look to head much lower.  Techs lead the market higher and are now leading it lower.  I am watching tech to try to determine where stocks will bottom.  I don't expect to see any signs of real support above 1,300.

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