Stocks Dive As Home Worries Spreads

FUNDAMENTAL ANALYSIS
With the Energy sector slowing its advance, it loses its offsetting effect against the home sector which continues to fall today like an avalanche. Many REITs, which are barely holding its nose above the water so far, fell like rocks from the sky. Leading indicators are also pointing to a slowdown in employment (not surprising there with enterprises moving overseas), a grim outlook for the upcoming earnings season and oil prices pushing $64, all contributed to a slightly negative sentiment in the market. You can find all the reasons to be pessimistic right now with not much, if any, reasons to be optimistic in the markets today.

TECHNICAL ANALYSIS
Not surprisingly, my picture of the Tower Formation setup yesterday has came to be today. With the Dow failing at the 12500 resistance level, the Tower Formation is completed and I see a correction back down to its support level at 12100. But will it laspe into a sustained bear trend? That truly is the golden question. I do not yet see a sustained bear trend coming, especially when the weekly charts have such strong support levels. I do speculate that the market will oscillate between these 2 critical points, 12500 and 12100 for at least another cycle before it decides where it wants to go.


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