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PRE MARKET

On radio yesterday, I stated that off of a good NASDAQ day yesterday, I received quite a few emails asking me if the bottom in TECH/INTERNET/SEMIS and all that crap was over. To repeat, in our exhaustive studies going back since day 1 of the markets, bear phases in TECH/INTERNET/SEMIS do not last weeks and only a few percent. Could it be different this time? We are open to all outcomes. Of course, we have no idea how long and how far but we do know by precedent, they usually last a while and they usually make sure they inflict enough pain on not only the latecomers but also those that think nothing can go wrong. To be blunt, bearish phases do happen. But that’s why we have definable levels of support. If they are not breached…terrific! We are all for it.

SO…watch the 6100 area on the NASDAQ initially. If it goes, we then talk about the vitally important 5940-5996 area. That’s the breakout in April and the initial pullback in May. For the NDX, 5568 and then the 5480 breakout. For the SOX, about 1020 which was the last breakout. Yesterday, the SOX bounced off exactly 1020.

We have no idea how things finish today but just notice how much easier it is to send these areas down as NASDAQ-futures hit again this morning. At the very least, out “complexion has changed” and our “changing of the guard” themes remain in force.

A few other notes:

BIOTECH remains strong. So far, it has passed the pullback test and moved higher yesterday….but if TECH breaks the big support, we suspect BIOTECH will not hold up. But keep this area on watch!

FINANCIALS still acting well off of the fake stress test. If rates on the long end head higher, that should help also…as long as the move does not get out of hand.

OILS better but were sold hard yesterday as they again rallied into the declining 50 day. This morning, OIL PRICES strong.

Lastly, could not help but mention the Polish people as the President is there today. My wife and I visited Poland for the first time this year. We did not know what to expect. Let me just say I have never met (and I have been almost everywhere) such proud, such confident, such optimistic, such freedom loving, such smiling, such America loving, such hard working and wonderful people in all my life.  A magnificent country but a magnificent country is as good or great as the people.