44.6%......Daily Charts Still Lofty As Is Froth....2 Gaps Unfilled Consecutively

So what do you make of today? A second gap down in a row, something we haven't seen in a very, very long time. Longer than that we haven't seen two consecutive gap downs that weren't filled. Neither one. That is a real change of trend. It also causes technical damage that bears can work with. The gaps aren't massive, and that's about the best news the bulls can take away from this change of trend. However, that does count. There's enough good fed news out there it seems to make those gaps eventually go away, but, for now, they do remain open, and that is the bottom line. You can't fight it but you can deny it. If and when those gaps can disappear only then should you get overly bullish.

The prevailing view is to believe all headaches can be removed quite easily, and although some argument can be made for that you have to recognize that two consecutive open gaps is not something we've seen in so long that I'm not as bullish in terms of just easily eradicating them. It can be done, but it should not be easy, and may not be done at all in the very short term. The bears have created damage. Now it's up to them to follow through, which is something they're generally very poor at doing. Maybe this will be their time, but we shall see. The onus is on them to take the bulls down from here. They have a short-term advantage. Let's see them take the good fortune they have with them and use it to crush this market lower.

When watching how the market is selling over the past few days the bulls can at least feel good about how the selling is taking place. The oscillators are not lagging the selling. They are moving with price, which means they are unwinding at a nice pace without too much in terms of price depreciation. Also, and this is key, there has been no massive selling off the recent top, which would suggest selling by the big money. Also that may represent a bigger picture change from bull-to-bear market. The daily charts, the index charts, are not showing any major negative divergences.

The key elements that change a market from bull-to-bear, thus far, are not present. This doesn't mean we can't sell harder. That we can't have a real correction if not at least a decent pullback which we really still haven't had. Just because the selling hasn't been of the bear market variety does not mean we can't sell hard for the very short term. The daily index charts are still lofty on their oscillators and have lots of room to fall before getting oversold or even down to neutral.

We are still clearly in a bull, thus, you always favor bullish outcomes, meaning we can move back up from here and try to remove those gaps, but don't be shocked if those not so great oscillators make things far more difficult for the bulls. We're not transitioning to a bear, but don't let your guard down here. Respect the froth and the lofty oscillators on those daily-index charts. Not the best time to be loading up long. Do what feels right to you.

44.6% A hair better on that bull bear spread over last week's reading, but in it of itself this is still a terrible reading for the bulls. They can't be happy about these readings, but they haven't felt any real pain yet with regards to selling so it seems to me they'll stay lofty, until the market inflicts some real pain that becomes unbearable over time. To get the bulls to calm down and to get the bears to ramp up the bears are going to have to hammer this market sideways to lower over several weeks to most likely months.

The bulls are fearless because they think the market won't fall due to the protection being provided by the fed and her global friends. You can't blame the bulls either. Why change what you're doing until you have a reason to. Also look at it this way. The bulls see these bad readings week after week for over a year, and still no lesson being taught to them. Of course, when it hits it'll hit hard and out of nowhere and leave many scars, but the bulls feel protected and that's the type of feeling we all like to have in all aspects of our lives. The market needs a long-term scare that still hasn't been thrust upon the bulls yet. Until that time comes you keep some scratch in the game, but you also respect the bearish possibilities meaning don't over play and play the best when you do.