If my math is right, after Monday, 11 of the last 15 Mondays have been bearish. So, I’m not too rattled by yesterday’s selloff… it’s par for the course. My concern is rooted in something much deeper than that. Remember the 50 day moving average line (purple) we started to toy with on the 16th? We still haven’t broken past it. Usually - though not always - those breakout moves happen pretty quickly and decisively. I don’t like the way this one is lingering…. I don’t get a warm fuzzy for the bulls.

Likewise for the VIX - after reaching new multi-week lows last week, it’s just been moving sideways (though the market has too).

If I were totally objective I’d point out how the last four days were nothing but a consolidation phase, and I wouldn’t be an optimist or a pessimist. I’ve been trained to be skeptical though, which has been the most productive/profitable mindset since October.

The good part about a consolidation phase is that whichever way the index ends up moving out of the tight range, it should stay pointed in that direction for a while. We might be able to squeeze a trade out of it.

Futures are up this morning, though they were up yesterday morning too when the Gaza/Isreal situation was less troubling. Either the conflict there wasn’t the real reason for the selloff on Monday, or someone is trying to push the futures higher so they can sell a bigger position into that early strength.

It just makes me want to reiterate something… the only price that matters is the closing price, which lately has only been determined in the last hour of trading. I wouldn’t worry about the futures or the opening price much, if any at all.

I’ll update this chart at the end of the day.

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