The consolidation continued today as market participants faced a sell off in areas that have seen recent strength. Technology was taken behind the woodshed and small caps saw a lack of bids sending them lower on decent volume. Breadth was close to 2-1 negative and on a continued bearish tone, strength was in oil and golds.

The only thing positive that can be said about today is that it is behind us. We have been speaking lately that a consolidation would be healthy and while it isn’t fun, it is important in a good market to see some backing and filling. The S&P-500 held the critical 1280 support and could still drift further towards 1275 in a healthy manner.

Today’s negativity is what is needed to wash out weak holders and sets us up for the next leg higher. On tap tonight is Intel, Yahoo, and IBM and a decent report could be the catalyst needed to spark new buyers to action.

We’ve taken the necessary precautions to handle this recent weakness and now it is important to simply be patient and let things play out.

Have a good evening

RevShark

**As we’ve been writing, Intel and Yahoo earnings are out, disappointing and both are selling off very heavy in after market trading. Should make for some interesting trading tomorrow.