Rally Fading...

If we go red today, it would just be bad. As I mentioned earlier today this was a strange rally because I just saw very little strength out there, especially from previous leaders. It just seems like a market that wants to go down.

It's beginning to feel a lot like 2002 around here. The issue is we can rally here and there, but I believe corporate profits for 2008 are too high and will need to be revised down in many sectors, so it is not like earnings are going to save us.

These days of openings up and closing on the low are just extremely bearish - we used to do the opposite. Just can't get behind any rally and all spikes are to be sold.

I am trying to think like a contrarian since the mood has turned so bearish, but since I was bearish first its like thinking against myself to get bullish :) But at some point the rally for more than 1 day must come. No? Worst month since Sep 2002.

The Russell 2000 and S&P 500 are now just up 0.4% after some rallying earlier today... but again lots of individual issues are just being spanked so the indexes are not telling the story. I would surmise most of the gains remaining that are holding the indexes up are simply dead cat bounces in financials. It now gets to the point of a toddler touching a hot stove - once you get burnt so many times, some people are just going to stop reaching...

All infrastructure stocks now are looking bad technically, even the best of the best - today AECOM (ACM) - a Cramer hype stock is taking down the group off of "not good enough" earnings (I thought it was too expensive and too narrow of a focus). Solar dying on a vine. Energy ex-solar putrid. Apple/Google red. Etc.

All I see working are emerging markets as investors are still clinging to the dream that the US recession will not affect them. Dry bulk index by the way falling hard now (from extremely high levels though, still way above range it was in the summer) but the trend is not looking like a 'global boom' type of trend. Copper has been weak for 2 months. Yet somehow China is expected to exist in its own vacuum ;)