Wednesday, September 06, 2006

Profit Taking Turns Into A Rout

The selling in the market accelerated after the Fed's Beige Book was released. It really revealed what we already know: labor markets are steady, consumer spending rose slowly, and housing to remain weak.

Nonetheless, the markets are taking it on the chin. Big cap tech is down roughly -1.9%, with the semis -2.9% and the energy complex off -3.2% as oil makes new lows (below $68).

But investor sentiment is quickly spiking. The volatility indexes are rising sharply, nearing their overhead 50-day averages. The CBOE put/call ratio is running at 1.28 and the ISE Sentiment Index is at the equivalent of 1.01.

My screens are basically a sea of red today, but as I mentioned before, I have built cash to put to work on any pullback.


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