THE CLOSE

An ugly day for the bull as the markets opened on a big gap up and sold down for most of the day. Market internals never confirmed the rally as they opened at their best levels and sold down as the indexes moderated indicating lower prices are likely. Banks, brokers and small caps underperformed most of the day which also emboldened the bears.

I have read in a few places that the easy trade was the fade of the open and every one knew it. I guess most trades are easy after they work.

Anyhow, the SPX is back in its trading range with resistance at 1290 and support at 1240, and now you have the next easy trade (lol).

The Volatility indexes are not giving any buy signals as they trade just a few percentage points above their 10 day SMA's; the 2 day RSI is giving a buy signal with a reading of 5 on the SPX. My plan is to hold off on any long index trades as there isn't much reason to buy stocks when every rally gets sold. I plan to wait for the lower end of the SPX range which could happen by Friday.

Continue to watch the IWM, the banks and the brokers as they continue to be the best market tells.