Everything that was good about the market on Wednesday collapsed as if the rally were built on nothing but a foundation of dry kindling. The NASDAQ still remains in an uptrend, but it wouldn't take much to break down here.
We won't propose that we know what is going to happen next. This market has so many times recently seen 80% negative breadth days like yesterday, only to suck in shorts and then climb higher once again.
This time may be different though. There are a great deal of stocks that are seriously extended. The transport index is breaking down, the economy appears to be heading for a recession, and sub prime woes don't yet appear to be fully priced in.
Bulls have their hands full today. Let's see if they can turn things around yet one more time.
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