Stocks Surrenders All Gains...

FUNDAMENTAL ANALYSIS
Stocks surrendered all of yesterday's gains today as the Dow retreated 236.77 points on a day without economic data nor major earnings releases nor breaking news nor rising oil prices. This can only spell one thing... widespread pessimism. Investors took the opportunity to sell into the higher prices set up by yesterday's short rally and yes, certainly there are some out there who made a quick buck today. Yes, investor sentiment in the market is decidedly pessimistic. In fact, not even a 5 days rally can convince anyone that the market is reversing back into a bull trend. On a week like this where there are no major releases, oil could be the only thing that can swing the market. Surprisingly, even with yesterday's lower crude inventory number, oil didn't stage the rally everyone was expecting. Was investors way too busy shorting stocks? In fact, stock traders could have sold off today in response to the that crude oil number as the sell off accelerated after the number was released. They are certainly not going to wait until they see oil higher again before taking action. I suspect we should see the full effect of that number tomorrow and yes, it only made the rebounding off the trend line scenario I mentioned yesterday more possible.

TECHNICAL ANALYSIS
A sideways day in the Dow today. In fact, the Dow have been sideways for 8 trading days now, forming a slight rounded bottom pattern. Clearly, the Dow have found a short term support level at around 11250 with the Dow already grossly oversold on a short term basis. This level continues to be a high probability area for a short term relief rally with a ceiling at about 11750. Indeed, with such a strong bearish channel in place, a reversal into a full scale bull trend remains a remote possibility.