OVERSOLD BOUNCE

I imagine SPX futures traders were salivating waiting to sell the gap up this morning. Market breath has moved to the red side as there are now 700 more stocks down than up.

The big losers on the day so far are the precious metal suckers with the HUI and XAU indexes both down over 2.5%. Oil stocks are holding up with both the XLE and OIH trading flat. The brokers and the bank stocks are trading a bit to the green but I am not making bets that will hold.

Truth be told, it looks like a flight to quality as the 10 year Bond is getting right back to the 5% level. The QQQQ is right back under where I sold them yesterday and I have no intention of buying anything (yet). GOOG is under 370 and it looks like Jimmy's $600 target will have to wait a while.

Both Dick Arms and Helene M on realmoney.com have columns up this morning telling us how oversold the markets are. Helene says her indicators show a turn in the markets for next week. Dick says we should bounce here on a short term basis. He said the same thing on Wednesday.

The next stop for the SPY looks to be the 200 day SMA which is not that far away at 125.6. I would guess we get there early next week and then the real fireworks will begin.