UH OH!!!!! That's what the over confident bulls were feeling today after good economic news was greeted with a drubbing in the equity markets.

WHAT????? I thought it was GOOD news. How can the market go down on such GOOD news????? The short answer is...it just doesn't matter.

Remember, markets bottom on bad news and top on good news. We may have a top in place.

The broadening top pattern I've been harping on appears to have a great chance of getting traction now. Too many people have been sucked over to the long side, which is what a BT (megaphone) top does. A megaphone bottom does the opposite...it traps the bears, but this one has the bulls square in it's sights.

975 to 950 looks like a good place for the market to rebound from on this part of the decline. If the rebound fails to make new highs, the larger pattern, which began in May, comes into play. That one should count down to 850 or so.

It will be the rebound from THAT level, if reached, which will set the stage for what comes next. A rebound that fails to make new highs from there.....lets just say it won't be a good sign for the bulls.

I thought the market would pull a fast one with weakness into late August and strength through September and October. Instead it set up PERFECTLY for the broadening top (aka: Megaphone pattern) with strength into the end of the month. It's almost like teeing it up for the bears...it really is. So today the bears hit a 300 yard drive down the center of the fairway. The bulls are saying "lucky shot...I bet he can't do that again". Well, we'll just see about that.