Monday Evening  5 July 2010

 In the last article on 1 July, mention was made about a rally potential, but on a "maybe" basis.  None,
of any consequence developed, and what was described as a weak market is living up to that
characterization. There is little need to get too analytical here.  The trend has turned down, for some
time now on the daily, and more importantly, also on the weekly.  Price remains in an oversold condition,
and the caveat issued last time about oversold conditions is that they can become MORE oversold.  Always
wait for a sign from the market before deciding a change has occurred.

 So far, none has.

 We still see the low from Thursday, third bar from the end, as important for the near term.  The range
was somewhat contained, volume increased, and the increased effort rallied to close near the upper end
of the bar.  The only force that can close a market on the upper end of a bar is stronger buying over selling
efforts.  One would not expect to see buying stronger when price is making a new low, so that raises a
red flag of caution for downside continuation.  Keep in mind, price has been down eight days without any
kind of relief rally.

 A closer look at a 60 minute intra day chart shows that the market has really been moving in somewhat
of a sideways direction since the 29th of June.  We also see the highest intra day volume occurred on last
Thursday.  There has been no downside follow-through, and that day could be evidence of stopping
volume, at least temporarily.

 "Could be stopping volume" does not mean that it is until the market confirms it.  Remember, the market
HAS to confirm every aspect of its activity before it can be established as true.  Given the weak character
of price behavior, it looks to us like last Thursday's low could be exceeded, and if it is, we would expect it
to be brief, with a counter-trend rally then getting underway.

 If that turns out to be what develops, THEN we will be in a better position to gauge where a counter
rally would likely fail, and THAT is where a short position will be entertained.   The obvious first level of
resistance is the 1035- 1040 area, where price clearly broke a support range.  Previous support becomes
future resistance.

 Elementary, as Holmes would say.  No place to pull the trigger, yet.