Participants continued to be thrown off today and we at Shark HQ officially have titled this the ‘Transvestite’ market. We’re not sure if it is a bear dressed like a bull, or a bull dressed like a bear, but what we do know is that Mr. Market is simply down right confused.

Breadth ended the day slightly negative and leadership was provided by small caps, semiconductors and oils. Can you pick the one that doesn’t fit? Select small cap charts are starting to set up at the same time that old economy stocks such as Phelps Dodge (PD) look to be breaking out. We like the action we are seeing in the small cap arena, but gravitation towards oil does not make us giddy.

Overall it looks as if this confused market has many opinions that are jockeying for the leadership position in order to take us into the final month of the year. Until this leadership is clearly developed it will be tough to call it either way.

We continue to believe we are simply seeing a healthy correction in a market that became too hot and too extended needing a rest. While pessimism starts to creep into the market we will be scouring the lists for opportunities that are sure to develop. For now we must be patient and see how this high heeled, boot wearing, bull bear combo plays out.

Have a good evening

Rev. Shark