Good news like DOW buying ROH and MRK buying SGP for cold hard cash was shrugged off. At any other time such news would have been greeted with glee at least within the respective sectors. Not today.
What does all this tell us?
As Eric has pointed out in the past, they kill the generals last and WMT, GOOG and MS are four star generals. My take is that we are nearing the end of the beginning of this bloodbath. The next phase will be a capitulation on high volume (may or may not be classic) followed by a relief rally of 20%. Only after this can we begin the long hard slog up the wall of worry.
Any rally will require a catalyst and if two significant mergers could not do it today, then we'll need something really big. Finding Osama would be great. Rescinding mark-to-market might do it, and those Congressional hearings start Thursday. This market is oversold and ready to pop.
I really thought today's morning rally could have been it, but alas, it fizzled. Who knows when this counter-trend rally will transpire, but in the mean time, keep your powder dry and be careful with those shorts.