A calm day in the market...

As mentioned earlier...market opened weaker and managed to go green within the first hour. We then chopped around and turned into the negative later in the day.
Some late day buying lifted prices from their session lows and at the end of the day we closed minus 51.29 % or - 0.64 %.

Due to the weekend there was little to report on the earnings front. As such fundamental issues were limited to comments from the government side (Summers was on Fox News) and of course the Swine Flu.

Considering the potential for a severe flu outbreak the market managed to perform rather well. We did trade down during the last 2 hours of the day but that seemed in response to general fatigue rather than true directional activity.

Be it as it may...I am still neutral stocks and expect a market decline. Dow 7800 seems likely with a further downside target of 7550.

I believe that participants will have a hard time finding any catalyst to drive the market higher in the short term. This combined with the uncertainty regarding a possible Pandemic...it just will be tough for stocks to rally.

Also...the prices for options have been increasing today relative to the actual market movement. This means that some investors are now viewing the likelihood of a bigger market move as higher and are therefor bidding up option premiums in response.

I do expect the market to trade lower and I also believe there is a chance that the market might see a sharp break later this week. (i.e. in case the Swine Flu becomes a more pronounced problem).

See y tomorrow,

Steve Benger