Today's market action illustrated a point I made over the weekend. The market is clearly anticipating a Fed rate cut in September. As such, there is little downside in the market right now. Bad news simply adds to the perception the Fed will cut rates while good news means the economy is in fact doing well.
While the market started lower today it rallied throughout the day. While the market sold-off on high volume at the end, this shouldn't be too surprising. The market made a strong advance today and my guess is traders were taking profits off the table.
Here's the 5-day, 5-minute chart. Notice the uptrend we started mid-last week is still firmly intact.
Here's the 3-month daily chart. Notice we are starting to move away from the cluster of activity around the 200 day SMA and are going into rally mode.