As much as I hate to say it … the last two days of an ‘attempted rally’ has shown me that we are in for more downside and probably starting tomorrow. It is VERY clear looking at the volume signatures in the market that the institutional investors are not interested in buying. You really don’t have to look very hard to see the incredible weakness in this rally attempt. Some value hunters are out, but without the fuel of the big dogs … it will be very short lived. Now with that said … maybe the institutions will come out over the next few days, but clearly they have no interest in playing in this market at the moment.
I’m very comfortable sitting in cash and waiting this one out. I would be shocked if we don’t have more downside coming and soon unfortunately.