Deja Vu

Today's Q chart pattern looked surprisingly like yesterday's, although the downdraft wasn't quite as dramatic. Unfortunately, after the close Cisco came out with earnings, and altho in line, the forecast for the rest of the year is so so. . . as a result of which, as of 18:00 hours, the Qs are at 42.28. . .down almost .60 from the close. This type of counterintuitive behavior is typical in a bear market. . .bad news= sell, good news=sell and that's the pattern we are continuing to see.

RIMM, IBM, XRX, EK, etc., all had great earnings, but all are getting whacked every day.

And lest you think that 42 will provide the buying opportunity of the decade, take a peek at the lower chart, which is the bullish % index for the NDX. The chart suggests that we are just starting a downturn cycle after all those buyers at the last 42 support stopped slapping themselves on the back for their brilliant technical insight. Of course, I may simply be channeling Chicken Little here. . . the sky may not be falling . . . but if the Qs do fall though 42 with gusto, then the possibility of a plunge to 36 becomes a distinct likelihood.

As an aside . . .how the homebuilders can be rising every day on consistent upgrades is a real head scratcher for me. I'm just waiting for the short covering to get exhausted so I can buy some TOL puts.