Back To Resistance

It ended up being a pretty good day after three days of pain. As you can see from the 5-day view of the S&P 500, we've just only returned a little under Friday's failed test of resistance.

Although I read some commentary that today's strength was due to the strong ADP employment report, I'm quite skeptical. If the market went down today, they would be citing the same exact report as the catalyst. I continue to think that bad news about the economy (providing it isn't concerning retail sales) is good here ahead of the Fed.

In my opinion, we probably just saw some portfolio repositioning ahead of the big bad jobs report. If that is true, portfolio managers were reaching for the large growth tech stocks and beaten down financials. Emerging markets were also on fire and given the gains of stocks like ChinaNatural Resources (CHNR) and China Precision Steel (CPSL) it is clear that the fast money crowd is pressing for performance.

So far this week has held true to expectations - it is keeping all of us on our toes. But, so far, so good. We'll see what tomorrow brings our way.