Fears of far-reaching government oversight in the financial industry and weak economic data coming out of Philadelphia are contributing to today's modest decline in the market. Many fear that this bill will hurt the financial sector as more government oversight is required. The bank bill implies that the government can have access to control banks when they are in a vulnerable situation.

Weak economic data from Philadelphia also disappointed analysts. I am concerned that the same people who termed "too big to fail" and bailed out these big banks causing huge amounts of debt for future generations are designing the legislation to "prevent" it in the future.

These last few weeks I have been warning subscribers about this decline and the possibility of a major drop following the very bearish death cross. Most For timely updates and specific recommendation please subscribe to my free newsletter at my website at http://goldstocktrades.com.

After a six day rally U.S. equities became quite overbought. I use oscillators to time market entry. Oscillators are used to identify short term market extremes. If the trend is moving lower, I will use the oscillator to tell me when the market is overbought for a short entry point. The recent market bounce with six straight up days gave extremely overbought readings. This means this recent rally went too far too fast.

The indexes now have downward sloping 50 day and a flattening 200 day moving average. Poor price volume action continues to plague this market as the rally has been on low volume which shows a lack of support from institutional investors. The slope of the 200 day moving average turning negative will confirm the death cross and a failure to break through the 200 day and continued weakness will be another bearish confirmation.

Yesterday, those overbought conditions were signaled and it coincided with the Dow reaching the 200 day moving average. Today's downward reversal from the 200 day is indicating that this counter-trend rally is completing. Traders might want to think of going short at this point as most traders who were shorting when the index broke to new lows have covered. It is also an opportunity to move to cash if you still have long positions.