Again broad-based selling from the start but this time once the 780 support was taken down the selling accelerated but at no time there was a sense of panic. Last 2 hours of trading show price recovering from oversold intra-day levels but ultimately failing again to close near the lows. Volume was high and it is trending down.

The consolidation continues and Fibonacci and support levels suggest it will extent to 750 or even 741. Volume overall for the rally has been high and now it is trending down which again suggest the rally is somewhat solid and that this down leg is a normal retracement. Overall fear is still high and economic fundamentals continue to be terrible so if 741 doesn’t hold we may test the lows. Analysts digested the GE’s PR info and concluded that GE is too optimistic and thus downgrade the earning estimates for this year and 2010. News of slow TARP start by only getting applications for 2.5% of the $200 billion available also spook the market.

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