Friends,

The current market conditions have now overwhelmed any developing long setup recently discussed. The only exception might be some gold stocks. While we were given a short, but tradeable rally in late June through the middle of July, that rally has fizzled and left us mired in the range, with increasing probability of breaking to the downside.

While a dead cat bounce may occur in the coming days, the damage done over the past two weeks is significant. As earnings season winds down, there is little in the way of catalysts that I see pushing the market higher. QE3 could prompt precious metals to move, but most stocks need much healing, which will take more than a few days or weeks. I intend to monitor various stocks and sectors, which may build bases while the market corrects. Meanwhile, current leaders seem increasingly vulnerable.

Best
Eric