Market Comment 5/03/06

Dateline: 5:54 pm Eastern time, 05/03/2006


The market opened lower on Wednesday and the selling didn't
let up until about 40 minutes into the trading day. The
market bounced back a bit, but the SP futures had trouble at
old 1314.50 support (turned resistance) and the selling
resumed. By late morning, the SP futures reached 1309.75 and
the Nasdaq futures went to 1693.00, and a feeble bounce
followed. Wedge patterns formed on the intraday charts and
once broken on the down side, the market dove to the
1308.50-1307.50 area on the SP futures and/or the 1689.75-
1688.25 area on the Nasdaq futures. With 90 minutes left in
stock trading, the SP and Nasdaq futures reached 1308.00 and
1687.75, respectively. We were on alert for a reversal from
support there and the market obliged by bouncing to 1313.50
on the SP futures and 1698.25 on the Nasdaq before softening
into the close.

The market is acting like it could get knocked over pretty
easily. The SP500 has refused to break out and now rallies
aren't sticking. We could remain range bound until Friday,
but odds are still better shorting the bounces as soon as
they fizzle.

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Good Trading,

Mike Reed