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  • Bernanke Holds Keys for Now

    By Rev Shark
    RealMoney.com Contributor
    2/13/2006 5:09 PM EST
     

    A little bounce in the closing hour helped alleviate the steady pressure we saw for most of the day. Breadth was poor all day at around two losers for every winner, but volume dropped quite a bit, which takes some of the sting out of the weakness.

    Sectorwise, retailers and drugs were the leaders while semiconductors, small-caps, golds, oils and technology in general were weak. Some are saying they are unhappy with the little bounce in the closing hour, but I don't see that as a negative. If it was short-covering, it tells us that there are bears who are afraid to press much more at this point, and if there was some real buying then perhaps there is some recognition that we are oversold.

    I continue to feel that things are not that bad and that we are close to a turn. I am still holding a good amount of long positions and I'm not seeing the sort of meltdowns in those holdings that I associate with the beginning of a major downtrend. Maybe that is still to come but I'm not anticipating that at this point.

    Keep in mind that new Federal Reserve Chairman Ben Bernanke makes his first appearance before Congress starting on Wednesday morning. If the market stays under pressure again tomorrow, we will have very oversold conditions occurring at the same time a potential market catalyst is occurring. I suspect that the market may anticipate something a little positive from Dr. Bernanke and may find its footing tomorrow. That is my working thesis at the moment.

    I hope the day treated you well. Don't forget that tomorrow is Valentine's Day (which I'd love to boycott if I didn't have to hear about it for the rest of my life) so make sure you make your plans. I'm going to be off tomorrow to attend to some personal business but I'll be checking in. I'll see you on Wednesday.

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