Sell Signals

Looks like the call of a pullback was on the money, and if IBM's earnings are any indicator I expect further sell signals on the Dow Industrial and new sell signals on the Dow Transports which to me indicate the true market direction. The "Trannies", as they are called, did not produce sell signals so as much as I am bearish for tomorrow I was suprised to see them escape while the DJI did not.

I would think we will get some follow through on upside of the XAU gold shares and the price of gold. Our TA gold guy has been calling for gold and the shares to rise since last Wednesday and it may be looking like he is bang on if we see another step up tomorrow to confirm those buy signals of the golden metal.

The big smackdown today was from the market reading into the leading indicator numbers that show the contraction in the US economy will last through the summer and up to 6 months. This is not a postive but is almost expected versus what we have seen in the daily news the last two months as more people struggle to find a job,keep their job and rein in their spending.

Oil took a major beatdown over $4 to the $46 range as predicted but much faster than I wanted to see. I am thinking it will take some serious good news to slow a sell off most of this week so expect to see some more downside movement as the froth is blown off.