Tuesday  Evening 6 July 2010

 Let us start with the good news.  The new low was the smallest decline from a previous sell-off, just by
about 4 points, if the 1002 low holds.  We know from this that the market pressure is lessening.  If it were not, the new low would be greater than it was.  Tuesday is the widest bar to the upside since the
mid-June high.  Finally, price closed in the upper half of the bar, and above the two previous lower closes.

 There is a solid basis why we keep saying to wait for confirmation.  Over the past 11 trading days, how
many longs are making money?  Not many.  Always, always know the most important piece of information
before making a trade decision, and that is: KNOW THE TREND OF THE TIME FRAME BEING TRADED!  This
is one rule for which there are no short-cuts.   The trend is down.

 Today's sharply higher open and early rally ran right into our projected resistance area we stated in
yesterday's article, 1035 - 1040, and then, rather than hold the gains, price steadily deteriorated.  The
prevailing down trend continues to weigh on the market, and it takes time to make a turn.  The intra day
hourly chart looked like a turn was in progress, but it was not confirmed.  We digress a bit.

 The other piece of good news is the volume, at least it seems to belong in the good news column.  The
level of volume has picked up at the lows, and price is holding.  That can be attributed to only one factor.
The buyers are stepping up and preventing the market from going lower.  Today's low is a line in the sand
that needs to be protected, and a rally away from current lows needs to happen, and soon.

 The bad news is that intra day price came down hard.  That is to be expected in a down market
environment.  The off-setting counter to this bad news is that the market was able to rally about 11 points
off the lows to save what looked like a potential larger sell-off.

 If, that little qualifier that always looms large, price goes under 1002 with ease, 950 and then eventually
850 are in the cards, and it does not take a fortune teller to make that determination.  Ending not on
good news nor bad, we have to wait for the developing market activity to tell us in which direction the
market will proceed, and then look for a spot to go with it.