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Technicians See Dip as Buying Opportunity

Modest across-the-board weakness today.

Predictably, the groups with some of the healthiest gains recently — autos, casinos, coal — had the biggest declines.

Several sectors declined on individual news — steel (Deutsche Bank downgrade of US Steel ), fertilizers (Cargill releasing its stake in Mosaic), banks (Goldman Sachs earnings disappointment) and HMOs/hospitals (Texas considering cutting Medicaid reimbursements 10 percent).

Some traders have been passing around comments from market timer Tom DeMark, who has been saying that we are within a week or so of "a significant market top" and that stocks could correct 11 percent or so.

Many technicians have been expecting some type of correction, based solely on the overbought nature of the market — for weeks. But most also note that with bullishness high any drop is likely to be viewed as a buying opportunity, rather than an excuse to get out.

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