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Even the gold bugs couldn't hide today. It looks like gold want to head back to 1,000.

And here's a shot of T2108, which is heading toward its oversold level of 20.

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In March 2006, the worldrs"s richest men sipped champagne in an opulent New York hotel. They were preparing to compete in a poker tournament with shy;million-dollar stakes. At the card table that night was Peter Muller, who managed a fabulously successful hedge fund called PDT. With him was Ken Griffin, who was the tough-as-nails head of Citadel Investment Group. There, too, were Cliff Asness, the sharp-tongued, mercurial founder of the hedge fund AQR Capital Management, and Boaz Weinstein, chess "life master" and king of the credit-default swap. Muller, Griffin, Asness, and Weinstein were among the best and brightest of a new breed, the quants. Over the past twenty years, this species of math whiz had usurped the testosterone-fueled, kill-or-be-killed risk takers whors"d long been the alpha males of the worldrs"s largest casino. The quants believed that a cocktail of differential calculus, quantum physics, and advanced geometry held the key to reaping riches from the financial markets. And they helped create a digitized money-trading machine that could shift shy;billions around the globe with the click of a mouse. Few realized that night, though, that in creating this extraordinary system, men like Muller, Griffin, Asness, and Weinstein had sown the seeds for historyrs"s greatest financial disaster.

You can listen to a discussion about it on yesterday's NPR 'Fresh Air' show. There's also an excerpt of the book posted on that NPR page.

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Reversed the two upgrades from yesterday...

Image by Getty Images via Daylife

I've written about resistance from the Nasdaq's 50-day moving average and it's still capping the index. With the market as oversold as it is the bulls should be able to clear that resistance. If they can't make that happen this week I'll take that as a very bad sign.

The price action on the S&P 500 is similar to the Naz although it's not as close to its 50-day moving average. It touched the bottom of the November - December trading range today and was able to bounce. The next hurdle for the bulls is to take out this week's high. BUt I can't get excited about the prospects here as long as its within that old trading range.

Two upgrades as 50-day moving averages got approached or crossed today.

From a technical standpoint, I want to lean against the 50-day moving averages of the indices. As long as the indices are below those averages I'm more apt to look for shorting opportunities. I'm not saying that I would be initiating shorts right now -- the market is too oversold for me to be comfortable doing that. But if we get a couple more days of relatively light volume rallies I'd look to short those.

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The Nasdaq is in a little better shape but it may be under pressure tomorrow given the after-hours action in the QQQ after Google's earnings. It may very well end up in the same position that the S&P is in -- right near the 50 DMA and the November highs. That would wipe out all of the late December, low volume rally.

Here's a GOOG chart which doesn't show the after-hours losses. It's been a rough January for the stock. First it had a sell-the-news reaction to the Nexus One phone, then China issues weighed on it and now it's earnings. People have been on CNBC defending it all the way down and they did so tonight as well. I remain unconvinced. I want to see it show some strength before I become an interested buyer. I don't see any significant support before the 500 level, so I see no reason to be in a rush to buy it here.

One downgrade today

A Freakish Situation

The market, freakishly, is in a situation markedly similar to what we had yesterday. Today we have a weak market following a very strong market. Yesterday we had a strong market following a very weak day.

Until this market shows the ability to put some kind of a trend together for just a few days, there is no point in trying to put a forecast together. The only rational way to handle it is to treat it like what it is--a waiting game.

Today's trading stats were strictly negative. All Ten Important Averages were down, as a group averaging -1.17%.  This compares to +1.33% yesterday and -1.09% the day before.

Today all 16 of the Breadth Groupings were Negative: 14 Super-Decisively and two Decisively. Yesterday all 16 were Super-Decisively Positive. The market day before that all 16 were Super-Decisively Negative. That's downright outlandish.

Can you feel his frustration? I've been sidelined the last few days (while switching brokers) but the action has even been maddening to me. I just *knew* the indices were going to break down today, especially with the dollar surging but they held support. Some chop is to be expected during earnings season -- especially the down one day, up the next day kind of chop. That's why I used to take the heavy earnings weeks off when I was swing trading. Days that gapped back & forth like the last few days used to drive me crazy when I was holding positions overnight. Based on the post-market action I think we're in for another reversal tomorrow. So Worden is right, this is just something you just have to wait out unless you're operating on a low enough time frame to take advantage of the intraday back & forth.

It seems that I'm always harping about (relatively) poor upside volume and I'm doing it again. The volume action, especially on the Nasdaq, has been poor. That's why I was really surprised to see support hold today. Until I see some higher volume up days I have to believe that we're building a top.

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Here are some stocks that caught my eye when running through my scans tonight. Below are Google Inc. (GOOG), Apple Inc. (AAPL), NetEase.com, Inc. (NTES), Morgan Stanley (MS) and IntercontinentalExchange, Inc. (ICE).

downgrades to all the short-term trends today

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Here's a look at the S&P 500 and Nasdaq. The bulls did an impressive job of reversing the intraday weakness. Both indices were able to eek out small gains on above average volume.

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I have no idea what mine is yet but I'm trying to figure it out very soon. I'm always drawn to promising mid-cap technology stocks though, so that's one place where I'll be doing research.