A Major Reversal Today...

Very interesting day. The market opened stronger and rallied early boosted by comments from Geithner who testified in front of the Senate banking committee. The advance ran out of steam within two hours of the opening and prices slowly but surely drifted lower.

The final two hours saw more aggressive selling and all of the prior gains were erased before finally all of the major indices closed in the red. At the end of the session the Dow had lost 54 points or 0.6 %.

Even though the actual net change for the day was only slightly negative today's price action might be rather significant.

The Dow made a new high since the recent rally started (going back to March 9th). From there the market reversed to the downside, erasing all of its earlier gains and even taking out yesterdays low.

This kind of market action is rather unusual and might very well signify that a short term top has been made. It clearly is worry some that the market reversed the way it did today.

I have been neutral stocks (with a negative bias) for some time now but now feel compelled to actual issue a market call. (see below). I am not officially short/bearish and expect the market to drift lower.

The expected decline might be slowed due to the upcoming holiday weekend but never the less I feel the market should work lower. A close above 8591 in the Dow would change my opinion.
Until that happens I am now short /bearish the market.

See you tomorrow,

Steve Benger

Market Call:
Buy Puts on the SPY (S&P Index, 90 strike) with a strike of 900. Liquidate in case the SPY closes above 93.20