A Shakeup Today

Many have been bemoaning the lack of volatility lately, as it makes for poor trading, but we finally had a good dose of it today. We had a downright buying frenzy going at midday, with the big-cap technology stocks leading the way. But news of a bailout deal for Greece caused the euro to reverse sharply and that triggered a good bout of selling. We also had another poor bond auction, but what sealed the deal for the bears was that a brief bounce attempt in the final hour failed. Once we took out the opening lows, another wave of selling hit, the dip buyers stood aside and we actually ended with a little red in the S&P500 and the Nasdaq. If you just glance at the indices, it looks like some mundane, flat action, but under the surface, we had a very big intraday reversal -- and that is significant. It is the first one in a very long time and it illustrates that the bulls don't have unlimited buying power. The news flow was actually quite good today, and the Greece bailout wasn't a big surprise, but sooner or later, market players were going to find an excuse to lock in some gains, and that is what they did. This sort of intraday reversal in isolation isn't that big of a deal, but it can be a good first step if a change in trend is developing. What the bears need now is some follow through to the downside and some unsuccessful bounce attempts by the dip buyers. A top will be a process that will take some time to develop, as the bulls are not just going to suddenly go away. While you might want to be more defensive and lock in gains, there still isn't sufficient reason to expect a major reversal. It was not a pretty day, but many wanted it, so we got it.  They say it will lead to much more interesting trading and better opportunities when we finally have something other than thousands of extended charts without good entry points.......Maybe; suppose so.