A rough day today on Wall Street, as stocks started weaker, tried to bounce back after about an hour, couldn't do so, and then fell sharply for the rest of the day starting at lunchtime. Stocks moved basically sideways for the final two hours, until a bounce into the close took them slightly off their lows. Volume looks to be lighter than yesterday, at least at this point, so distribution was avoided.
Technically, I said that any pullback we get needed to hold the previous breakout levels of 1775 and 930 - as long as they did, we wouldn't have a problem. Today, the S&P did go below that level but not drastically and held it OK. It also held its 200 day moving average which is bullish. I don't know yet that we can say it successfully tested that previous resistance level - we have to see if it bounces off of it - but overall today was not bad. The Nasdaq held up well and is nowhere near its previous resistance as it continues to be the leading index.
It looks like oil and commodities in general pulled back today as the dollar rose. In some cases, there were what look like significant breakdowns (see stocks like POT and AEM). I pointed out two days ago that the U.S. dollar was in a technical position to put in a bounce, and that you must be careful with commodities here. Hopefully you didn't get hurt today. What we have to see is if this pullback is just starting, or if it will be a one-day wonder with the commodities rising back up tomorrow. Much of this two-month rally has been on the back of these commodities and specifically rising oil prices, and if that changes, along with lagging financials, then things could get tricky for the bulls.
I continue to look for really attractive setups on the long side but for now, I am remaining patient and am still in cash. Some of this is due to a lot of things I have going on at my workplace right now which has kept me busy. Those duties will lessen greatly next week, so hopefully I will be able to get back in the right frame of mind soon and the overall swing of things soon. Of course, that is dependent upon this market and the opportunities it presents to me.
Overall, nothing really to worry about today other than the commodities getting hit - just keep an eye on that. I wouldn't want to see much more selling in that area if I was long. I would like to see this area hold on the S&P and if it does, the bulls remain in control. The things to watch for (as always) are if heavier volume comes in on any further selling we get and how leading groups hold up. Good luck Thursday and take care.