With all the evidence pointing south, Mr Market decides to buck like a bronco and stubbornly head in the other direction.
It's easy to forget how many traders have gotten burned on both sides of the market.
In review, here's what we've been looking at for at least 3 months.
The market makes continual yet sporadic new highs..but why all the gloomy faces?
Because anyone watching closely can clearly see that those rally's were focused on a small subset of stocks..In other words, they had terrible breadth..not breathe ;-)
We saw it here..the market would go higher yet the small caps barely budged.
In contrast, when the market dropped, the small caps came off hard.
All of this pointed, and I believe still points, to an issue with the market going higher.
Unless something drastic changes and the bulls clearly take control of the market, I look at today's action with skepticism.
Sure, the way stocks reacted to today's mid-day "the global economy is in bad shape, so no interest rate hikes" FOMC minutes was how we'd had hoped they would have reacted countless times in the past few months..but it wasn't to be.
Anyway, as you can see from the chart below, many were, and are, expecting the Dow to have dropped to test it's 200 Day MA..clearly being in the neighborhood of it isn't enough.
From my experience, the 200 and 50 Day MA's act like magnets whenever entities get near them.
Also, we now have a double bottom in place at around 16,670
Coincidentally, very soon the 200 Day should slowly rise to merge with the double bottom level all the while the 20 Day might cross down through the 50 Day.
Anyway, I'm going to want to see the market get above 17,000 and hold it for a period of time.
Then I might look at the scenario differently than yet another bull trap.