Searching For Support

Much like yesterday, the good news is that we held the S&P 1320 level on the retest. What's the bad news? That we held 1320 on the retest.

Nevertheless, the bulls have to be very happy with the day overall.

Like clockwork, buyers came in to defend the 1320 level and, in spite of good reasons to break down, we held up under pressure. In addition, the market was able to shake off the bad news. For example, we had more bad news in the retailers, yet the retailers led the market higher. Even disappointment surrounding Cisco Systems' (CSCO) earnings report didn't last very long as the stock managed to shake off the losses and manage a slight gain for the day. Ordinarily, that's textbook "bottom making" material. When stocks rally on bad news, that's a positive. But, it will have to last far longer than just one day. We need to see a whole lot more.

As you know, I would have preferred for the market to break down and to finally get the level of panic we need (and that may eventually follow), but the market isn't cooperating. At least not yet. There's no rule that it has to and, like we all know by now, Mr. Market has a way of creating the most amount of frustration for the largest number of people. So far in 2008, it is doing a bang up job of it no matter what side of the market you currently find yourself on.

It is always a good idea to remind ourselves that this too shall pass and there will be easier times ahead. I promise.