Although the major averages were up for most of the day, a sell-off within the last 20 minutes of the trading session helped notch a fifth straight day of declines. This despite bullish comments from Chairman Bernanke and how he sees stronger growth for the second half of the year. The Dow (chart), Nasdaq (chart) and the S&P 500 (chart) all finished modestly lower on the day, with the small-cap Russell 2000 (chart) actually eking out a slight gain.

One of the concerns I have is not only from a technical standpoint (blog), but now seemingly the psychology of the markets is such that any kind of rally is to be sold until we are at a true oversold condition, or we hit the 200-day moving averages on the indexes. If this is the case, there is still plenty of room to the downside to go. I am not predicting such a move but if the market sentiment remains as is, it could become a self fulfilling prophecy. That said, there does not appear to be much market moving economic news scheduled to come out the rest of the week so it’s possible equities begin to trade sideways a bit, which may not be such a bad thing.

Have a good evening.

~George