Once again, the bulls couldn't quite manage the strong close, but they did put together a pretty good bounce in afternoon trading after flopping around most of the morning. There just wasn't any rush to add long exposure.
For the second day in a row, the S&P 500 topped out almost exactly at the 50-day simple moving average. That is a very obvious overhead resistance level and it served as a selling catalyst once again.
It's always a relief when the market bounces back after a technical breakdown, but many folks are too quick to sound the "all clear." There is nothing in this action to indicate that we are done correcting. In fact, the lackluster nature of the bounce suggests just the opposite.
To make things even more challenging, we should have very thin trading tomorrow in front of Memorial Day weekend. If someone big wants to push things around a bit, they will have the chance to do so tomorrow.