After a long slide most of the day, the markets managed to make up some ground into the close. Gold lead on the day surging over 4% while Oil took second with a 1.8% move; these are not the sectors we like to see leading a market. Every other sector was in the red with Semis bearing the brunt of the selling. Breadth improved but finished lower on the day while volume was average, considering the holiday shortened, preceding week.

The market looks to be on shaky ground as we enter earnings season. Today's intra day reversal in the Semiconductors is particularly troubling and we'll be watching the action closely for signs going forward. We still feel good about the pessimism that has been built in but aren't rushing into the weakness at this point to do some buying. We have our eyes focused closely on the key technical levels in the major averages. These levels such as 2300 on the NASDAQ have been holding however a close break here would cause us to raise our levels of caution significantly.

Starting tomorrow our focus of attention will shift to earnings and will set the stage for the next several weeks. Rest up because the action will demand you be at peak performance.

Have a good evening.

RevShark