5/30/06
ATR - End of the Day

The only good that can be drawn from today, is that we are once again testing the lows which may set us up for a sustained bottom. It isn't surprising to see last weeks light volume, dead cat bounce fail and the key now will be to see if critical levels such as the 200 day moving average on the S&P and Russell 2000 and 2150 on the NASDAQ hold as a break here would definitely spark further selling and force us to become much more cautious.

Breadth was terrible and every major sector finished in the Red. Volume was light, however intensified as the day wore on a signal that institutions were lightening up into the close.

Tomorrow we have the minutes from the FOMC meeting, which may provide some further clarity as to the future of interest rates. We don't put too much stake in this as a catalyst for a snap higher, but it is worth keeping an eye on.

While today was brutal, it was not yet enough to have us significantly raise our levels of caution. We have raised some decent cash and feel solid about our longs. Should the markets hold here we are prepared for the bounce however, should we see further selling, we won't hesitate taking the appropriate action.

Rest up, it may be another long week. Have a good evening.

RevShark