06.08.2011 Update -- Same Ish different day

No charts tonight. We are in the exact same place we were yesterday. The DOW is still holding a trendline barely and every is just even more oversold than yesterday.

I think the DOW is holding the fort together here from just taking a swan dive down about 20-30 points on the S&P.

We may bounce, we may not, but as i've been saying, we will at least challenge the 200dma on this sell off. Still looking for the 1265-1250 range on the cash.

Some other points of note;

The XLF. If the XLF was a woman, it would look like this;

That's how ugly the XLF looks. Unless the market pulls some ginormous rally out of its ass here over the next month, I don't think there's any way to avoid the XLF getting a death cross as the 50 crosses under the 200. I don't see how anything could look good for the overall market going forward with the financials sporting a death cross.

For Point 2;

The Transports look like they are crashing. They are down from 5480 to 5080 in 5 days. That's a 400 point move, that's a 7% move in the trannies in 5 days and one of those days was a green close, so really it's lost 7% in 4 days of trading.

For Point 3;

Want to know how truly bloody it's been in the financials?

WFC, BAC, C, MS and GS....

every one of those stocks are down 25-35%!!! for the year. Since Jan. 1.

What was that cocky guys name that was on CNBC pumping the financials a few months ago? The guy that was loaded financials and stocks in general as long as Ben was pumping money. Yeah.. he's probably not having such a good year right about now.

Last Point;

So.. take a wild guess.. Which sector (besides consumer staples and the obvious defensive areas) looks in the best technical shape right now?

.... dum dum dum...dum dum... dum dum dum... dum dum... dum dum.. DUM.... dum dum dum dum dum.. dum dum dum... dum dum.. dum dum dum... DUM... dum dum dum.. dum... dum...... dum...

Yup.. phucking IYR. That thing astounds me. I mean I know REIT's do get some benefit from low rates... but half the index is also the freaking home builders... in a double dipping residential market!.. At some point too, a tanking economy is going to affect rent per sq. ft. If you signed a typical 5 year lease in 06' and made it through all this mess. You're in a good spot... cause it's 5 years later and you should be able to re-negotiate your lease for a lot less money. That thing will crack, it's just a matter of time.

So... for tonight..same deal as yesterday.. oversold can become more and more oversold and we can bounce at any time. But I do expect the 1250-1265 range to be hit before we can think about any possibility of this being over.

GL

CJ