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Information flow from institutional contacts is relatively light today as trading desks take a wait-and-see attitude following a one-day attempted shake out in global equities yesterday. From a technical perspective, market watchers focusing on near-term support levels (e.g., Dow 9500 and S&P 1019) to get a feel for the short-term health of the market. If key supports are taken out, may see active accounts look to become more aggressive on the short-side. Of course, many traders viewed yesterday's weakness as the first leg down in a consolidative period for the markets. While certain heavily contested names have followed through to the downside (e.g., PCLN -2.56 and BSTE -2.24), the majority of the stocks that rising short-interest suggests are due for a pause are demonstrating that they don't fold after losing a round. The real area of interest today from a trading perspective is who is giving up on short positions and who has the fortitude to use covering squeezes as an opportunity to put on new positions. From an investment perspective, some analysts continue to jump aboard the momentum train with extremely late bullish calls on stocks that have doubled while they have carried a neutral rating. Both institutional or individual traders have stopped paying attention to these calls over the past several weeks. The only calls really getting respect these days are those with a negative slant (e.g., Goldman's recent negative call on Semi Equip). In terms of resilient stock prices, money continues to flow into funds as main street slowly figures out that the markets have been booming. That money continues to be put to work.
