You know, it's not that the market lost a fair amount of ground on Tuesday that bugs me. It's that it lost ground at arguably the one place the bulls couldn't afford for it to lose ground right now... at a major inflection point. The chart of the S&P 500 below tells the story pretty well. That is, a former ceiling around 1949 and the 50-day moving average line now also at 1949 seem to have quelled the rally effort before it ever really get a chance to get going. This is all a textbook case of hitting resistance. Granted, the 50-day moving average line as well as the prior peak around 1929 is where the bulls should find an impasse. I'm just saying, a bullish victory here would have made it much easier for the index to plow through that thick layer of resistance all the way up to 2075. Now that the index flinched, the buyers have lost some confidence, and the sellers have regained some of their moxie. I don't want to spook you too much; this may just be a one day thing. As I mentioned last week there's a good chance the market will just bounce around between the 20-day moving average line (blue) at 1897 and the ceiling at 1949 for a while before punching through. I'll also point out how today's volume is pretty minimal, suggesting this is not a majority opinion. I'm simply saying, the bears just won a victory that they could leverage into more victories in the foreseeable future. The really scary possibility is the same one I brought up last week - that stocks may just chop around for a while. That's the Elite Opportunity's John Monroe's point of view as well, although the potential trading range he sees is much wider because his is on a much bigger scale (and could last longer too). Without getting too deep into his analysis for EO members today, I think I can safely show you this snippet from Tuesday's Elite Opportunity newsletter: "It's pretty common knowledge the NASDAQ and the Russell 2000 represent the bulk of growth stocks across the equity markets, so until they both start to show signs of leadership again, we're going to question the markets' recent bottoms. I could be wrong, but until we see much more of a risk-on mentality developing, all of the 5/8th's retracement levels shown in the ETF's above represent what we're considering to be extremely key pivot points for the markets going forward." I hadn't thought much about that lately, but I think he's right... in the grand scheme of things we're still not seeing a great deal of zeal behind the buying. John had a lot more to say than just what you read above; he always does. Like we discussed before, he's the master at differentiating long-term and short-term trends, and long-term and short-term data, and most importantly, he's the master at getting the most out of both. Stocks are tricky mostly because too many people struggle to separate near-term and the long-term information, using information regarding one to make decisions about the other. That's how John's been able to beat the market so well for so long. He understands and sees past all the noise. If you don't have a subscription to the Elite Opportunity newsletter you're not getting all you can out of the market - we only scratch the surface here in the end-of-day newsletter. Here's how to become an EO member, or just cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ Surprising Sector Leadership Speaking of clues suggesting there's just not much of a risk-on mentality right now, I realized it's been a while since we've shown you an updated chart of each sector's relative performance (that is, compared to one another). So, with no further delay, here it is - the proverbial clock starts exactly one year ago today. [The dashed lines connect the labels to their corresponding performance, but it's kind of tough to see which line goes where in the midst of some of that mess. So, the lines and their labels are color coordinated as well.] It's interesting how telecom, staples, and utilities have quietly taken the lead over the past four months or so, but even more interestingly, they've widened the lead in just the past month. This theoretically shouldn't be the case if traders are truly thinking bullishly. Those leaders are defensive sectors. If at least part of this discussion rings a bell, that may be because we were fans of the utility sector a long time ago, pointing out this very thing looked like it was about to happen. You're welcome. Anyway... Bonds, Yields Resume Their Prior Trend Last but certainly not least, we wanted to show you an updated chart of bond yields and bond prices, using 30-year yields and a long-term treasury ETF as our proxies. As one would have guessed based on the shape of the bars from the 11th, we did get a brief a reversal of the trends that took shape at the beginning of the year. But, after last week's and this week's - and today's action in particular - I think we can say with some certainty that yields are falling again, and correspondingly, bond prices are back on the rise. In both cases we saw pretty significant outside-day reversals, and the wind was already blowing in the respective directions of those reversals. Once again this is telling us the market either believes Janet Yellen won't follow through on her pseudo pledge to dish up a couple more rate hikes this year, or says the market overshot on its previous prediction of how high and how fast rates would climb this year, or both. Either way, while the respective trends on the chart above look trade-worthy for the time being, I'm just not sure I'd dig in too deep if you're trading them. Even in the face of just so-so news the Federal Reserve was still Jonesing to inflate rates. If we get any sort of decent economic backdrop put back into place at all, I can see Yellen going ahead and pulling the trigger on rate increases anyway... even if it catches the bond market off guard. It seems like she's worked her way into a "I have to in order to maintain credibility" situation. Do you want to trade things like yields and Treasury prices? Even if it's not part of your normal repertoire, I'd suggest adding it to your list of things you're willing to trade simply because we've seen these instruments move quite nicely even when the stock market isn't. Heck, these may be a particularly fruitful pastures now because the stock market itself is stagnating. They may be the only way to make a near real money for the next few weeks. If you'd really like to add bonds and yields to your trading portfolio, again, I strongly suggest the Elite Opportunity newsletter, as John has been doing quite well pin-pointing the buy and sell points for bond and yield ETFs.