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It's been on our bearish list

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Shares of Professional Detailing (NASDAQ:PDII) have been on our bearish list on OptionInvestor.com and we haven't had too many positive things to say about the stock today in the hot list. The recent trading sure looks like market makers are playing some defense in the stock. After the "bad news" that the company had lost a contract with Pfizer (NYSE:PFE), AG Edwards upgraded the stock from "accumulate" to "buy". We didn't think the technicals represented a market that was buying it, but then we don't do any investment banking either.

Professional Detailing Inc. Chart - last nine months

Shares of PDII look to be breaking down today and most market participants are going to be eyeballing the $50 level as their downside. We think traders can take advantage of the markets defensive posture with the stock and play this one to the downside still.

Markets still back and forth

Stocks have been trading above and below Friday's close and there is very little sense of direction. Traders that have been keeping an eye on bond YIELDS and believe that a higher YIELD is indication of selling in bonds and that money rotating into stocks, probably has the feeling today that the cash fuel gauge is running on empty.

Individual investors aren't the only ones who have seen a stock rally 10% over 2 or 3 sessions, then give it all back as the market runs out of cash. Fund managers have seen the same thing and aren't going to be to eager to continue to bid stocks higher if they don't feel there will be a lot of competition from money rolling out of the bond market.

Bond YIELDS have been relatively little change today. Earlier in the session, the 30-year and 10-year YIELDS were at their highest of the session, but reversed lower and went back into the red. Since that time, stocks have slowly been drifting lower. Not only does it "feel" like the fuel gauge in on empty, it "looks" like it too.

Jeff Bailey
Senior Market Technician

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