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Broad based selling on first day of spring

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The first day of spring is often times associated with a revival of new plant growth and wonderful smells. Today's market action looks like a revival of selling as the S&P 500 (SPX.X) continues to find sellers at or near the 1,175 level, and the smells of spring that greet a bulls nose are more like that of a stockyard on a warm summer's day.

Selling is rather broad today with the Semiconductor Index (SOX.X) trading down 3.1% after what some had felt was a more bullish semiconductor book-to-bill number releases late yesterday after the close of trading. Also weaker on the session for the second straight day is the Airline Index (XAL.X) -3.18%.

Bristol Myers Squibb halted

Trading in shares of Bristol Myers Squibb (NYSE:BMY) $48.65 has been halted and no trades have run today. The trading halt was instituted ahead of data from company's Vanlev congestive heart failure drug study, which will be presented today at the American College of Oncology meeting in Atlanta. BMY will announce results of a study called Octave that examined a problem of facial and neck swelling in some patients, and Overture study of roughly 4,000 patients suffering from congestive heart failure.

Merrill Lynch downgraded the stock to "neutral" from "strong buy," which in itself smells like a stockyard on a warm summer's day. The rating downgrade came after reports that there were a large number of sellers hovering around the BMY post on the trading floor of the NYSE. Merrill will get "credit" for their downgrade at the last trade, not the opening price.

Bristol Myers Squibb Chart - $1 box

I don't know where shares of BMY will open for trading, but if they were to open at or above the $48 level on a negative report, I'd be looking short/put the stock and targeting the recent lows near $42. A stop on an outright short would be place just above the $54 level, which would be a break of downward trend and create a double-top buy signal.

Jeff Bailey
Senior Market Technician
Option Investor

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