The FOMC started its first day of a two day meeting whereby they will be voting on whether or not to raise/lower/keep steady the FOMC Target Rate.  There was much fan fare about a better than expected housing report but the report still displayed prices had dropped to 2004 levels in many areas of the country.  Big cap stocks were able to hang onto positive territory until the end of the day.  Although buyers stepped in at the close it couldn’t stop the market from ending in red across the board.  Volume soared across the board, no need to count distribution days as we are clearly in a market correction or better yet:  BEAR MARKET.  The action does not look good at the moment, it will take some work to over come what we’ve just witnessed.

An important “internal” that his often referred to NH/NL ratio continues to spell more trouble for the market.  Yesterday there were 715 New Lows and only 83 New Highs.  We’ll need a favorable NH/NL in order to sustain any type of a decent rally.  Yesterday’s ratio of better than 7 to 1 ratio of New Lows to New Highs demonstrates how weak this market is and has been.  NH/NL is something to keep an eye on as we move forward with this market.

Crude oil will be a hot topic today as inventories will be released.  With July 4th fast approaching I would assume attention will be drawn to refiners and how they have utilized their capacity to supply consumers with gasoline for the July 4th holiday.  As I referred to yesterday, crude oil is setting up for a parabolic run and it would surprise me one bit to see it start to break today.

This market is sick and should be avoided.  Although I have folks informing me we have a 90% chance of rally today I just don’t buy it.  Would I take it, certainly.  However, with unfavorable internals its not something I am overjoyed with.  If we do rally, which would be real nice despite my bearish tone here I can look for great growth stories and profit handsomely.  Best thing to do is enjoy the summer weather!!!

Market Speculator

Last 5 posts by Market Speculator

• Quality Growth Stocks Lead the Way as Stocks Advance in Mixed Trade - June 2nd, 2009
• Re-Inflating the Bubble; Inflationary Pressue Lifting Stocks - June 1st, 2009
• Treasuries Begin Their Decline Striking Fear into the Stock Market - May 28th, 2009
• Follow on Twitter and Seeking Alpha - May 28th, 2009
• Sipping on a Cup of Coffee Deciphering Whether or Not The Stock Market is About to Make a Leg Down - May 11th, 2009