Market Wrap

The markets were lower for a 2nd day in a row, on the heels of some weak reports from the financial sector. Volume was about even with yesterday, maybe a little higher.

Breadth deteriorated also, with the A/D line on the NYSE at -1444, and the Hi/Lo Indexes slipping back into negative territory.

Bearish sentiment rose slightly, as the put/call ratio bounced back to 0.94, while the ISEE was fairly low at 121. But we need to see bearish sentiment build even more, coupled with the market moving back to oversold, in order to set up for another good buying opportunity.

Bernanke spoke today and said that the Fed will continue to watch the economic situation closely and act as needed. Later in the day, the Catepillar (CAT) CEO said that the housing market in the U.S. is the worst since WWII. Additionally, Dataquick released a figure that said home sales in So. California were down -48% yr/yr.

So while the odds of another rate cut at the end of October have been going down, datapoints like the ones above would lend themselves to another cut sooner rather than later.

After hours, INTC and YHOO reported solid earnings and their stocks are higher. This could improve sentiment tomorrow, and help the markets bounce. But I am still sitting on the cash I recently raised.

long INTC