My initial reaction to today’s movement was a definite meh. But something kept bothering me throughout the day. Plenty of chop, after the morning drop bulls successfully defending yesterday’s close and/or VWAP, mostly a range-bound day… what was wrong with that picture?

I stared at the $SPY 5-minute chart for a while after the close, and suddenly it hit me: the “level” that the bulls managed to “defend” was that created by the very tail end of yesterday’s selloff day. Yesterday’s close–a number I’m used to watching the rally cats keep under them at all times like a pair of butt cheeks–was extremely weak.

Instead of looking at what the bulls managed to do–keep the market from dropping further–I needed to go all half-empty and focus on what they failed to do: move us anywhere up. So we work off yesterday’s short-term oversoldness without regaining any ground. Sound familiar? That’s because it’s the way we’ve been working off short-term overboughtness over the past three months: “whatever happens, don’t sell.” Well, today, whatever happened, the market didn’t buy.

I believe sideways can no longer be called bullish. And I further believe that absent tomorrow’s FOMC statement, things would have looked even worse today for those believing this rally can continue from here.

Without further ado, your recaps:

  • Market Talk (summary, no charts. Just how does Paul Vigna say so much in so few words, anyway?)
  • Zero Hedge (charts and comments. First-time link–doesn’t always recap–but I assume you’re doing the right thing and visiting the blog regularly anyway.)
  • Cobra’s Market View (annotated chart analysis)
  • Tickerville (video chart analysis, ~10 mins)
  • The Chart Pattern Trader (video chart analysis, ~20 mins. Spends a lot of time tonight doing chart work on $SDS, which I find a little dubious)
  • Jack McHugh (summary with links, no charts)

I also highly recommend Hugh Hendry’s June letter for a bigger macro picture on prospects for 2009 to be a 2008 do-over. Very thoughtful stuff.

Good luck out there.