Gauging The Decline

The markets have accelerated to the downside today on news that there is a potential coup in Bangkok. Also YHOO reported that it expects its Q3 to be at the low end of its forecasted range, and this is weighing on techs and Internet stocks.

Of course, the market was poised for a pullback, so today's news could just be the excuse for profit taking. The YHOO news is company specific, and the reaction in GOOG looks overdone, as GOOG is likely taking market share.

Oil is down another $1.75 today to roughly $62, and bond yields are falling precipitously to 4.74%. So there are more signs of moderating inflation.

As for investor sentiment measures, the VIX/VXN indicators are popping, as are the put/call ratios. The CBOE put/call hit 1.80 today, and is still running near 1.50. The ISE Index is running at the equivalent of 0.98, an elevated level.

All of the above should limit the extent of this selloff, even as it is healthy for what was becoming an overbought market. I still think that you can buy the dips.

long GOOG