The market started on shaky ground, traded lower throughout, and despite a small up tick in the final minutes, ended poorly. All sectors ended the day in the red with recent leader Gold bearing the brunt of the selling with select technology and the general small caps not far behind. Hit especially hard were the higher momentum stocks, which saw bids disappear in addition to panicky selling creating many long red bars and carnage throughout. Especially challenging was breadth, which finished over 3 to 1 negative in both the NYSE and NASDAQ, coupled with higher volume. It was a clear day of technical distribution which is a negative but the market has the ability to handle a few before we really have to worry.

Running through the list comprising today's action there is not much that can be viewed as a potential positive. Bears will take these various factors and make the case that the end of the world is upon us and the markets are doomed. Ironically, it is during the darkest hours when Mr. Market tends to show up with a very strong flash light.

Despite the carnage, the S&P held the 50 day moving average while the NASDAQ held critical support. The Semiconductor holders finished lower on the day but still clings within striking range of the 200 day, in addition to short term trendline support started in mid March.

At least at this point we remain optimistic. While the selling is extreme, we had been looking for a draw to replace the giddy optimism with pessimism and there is
no question this has happened. The wall or worry has definitely been rebuilt very quickly. Now the only question remains is do we start to scale, or are there still a few more bricks that need to be put in place.

We suspect volume may dry up Wednesday and Thursday as many take off for Passover with Friday being a market holiday. Rest up as the action will definitely remain choppy.

Have a good evening.

RevShark