The action on Friday and then again today did little to bolster the possibility of a strong bullish move above 900 and beyond. Oh, 850 held like I suggested Thursday night, but the action off of that level has been most, how shall I say this, uninspiring.

A lot of the intermediate term indicators I use have cycled from VERY oversold back to neutral or even overbought. Meanwhile price hasn't advanced that far from the bottom.  Also there's a pattern in the VIX that COULD break to the upside, which would mean a downside break for stocks. 

However, lots of people have apparently recognized that obvious pattern. When that occurs my experience has been that more times than not the pattern doesn't play out as indicated. So the recognition of a bearish pattern could be bullish! Sounds crazy doesn't it. It's just another way the markets frustrate traders. 

With the Fed statement coming tomorrow we could begin to get a resolution to this sideways action. Right now it appears possible the markets could go either way. A blast all the way to 1000 or so could occur in as few as three days, or just as easily it could break down hard and be retesting the lows in the same time frame. Either scenario really could happen so be prepared.

I believe the greater danger here is to get caught in a vicious decline, so be alert. The numbers I mentioned Thursday night still apply.