After a very strong open today where up volume was running over 90%, the market failed without even touching the 930 highs. This was the third trip to that neighborhood and it ended badly. Breadth was still positive on the day, but it was the reversal that bodes ill for the bulls.  

Now the bulls have left the door cracked open just a little. Tomorrow we get to see if the bears can push it open and walk on through. There's a good chance they will.

The 875 area has been tested (in the futures market) once so far. I'm guessing round two is coming up. I'll not be surprised if it fails and opens the door to 850. I'd expect another bounce to develop from that area if it's hit. It's after that when it'll get interesting.

The reason is the following question: "has the bounce from the March lows ended or not"? Unfortunately it may be difficult to tell just yet as even a deeper retracement than 850 won't guarantee it. However, a break above the January high of 943 will mean the answer is no and it has further to go. That part is very clear.

But it is possible we've seen the top, so be alert. I can't even begin to tell you how bad of a situation that would be. 

Momentum money is once again running to commodities, including oil and unleaded gas. Don't bother thinking about fundamentals. They're irrelevant. Do you think the momentum folks care? Not hardly. Price momentum is the only fundamental they're interested in.

You'd think they'd have learned. This next lesson may be worse than the last one. Perhaps that's how some of this newly minted money will get devoured. Why loan it to some schmuck that can't pay you back when you can ride unleaded gas back to $4.00?? And if it collapses on you again don't worry because you've been deemed "too big to fail"? Could it be that simple?