The S&P continues to consolidate. Financials are still weak (XLF is flat on the day) and it's obvious that there are no aggressive buyers in the market. To turn the market around at this point the bulls need a big washout (not just slow trickle down days) or significant fundamental news. The washout would have to cause panic similar to the drop that led to the lows in January. This has not happened yet. A shift in the fundamentals would really have to be large (ie government bailout of bond insurers) and credible, which could be the hardest part. Traders don't trust Bernake or Paulson, period.
The drops continue to be more significant than the pops. Everything participates in the downside fade but only a select group participates in the upside.
Resistance on the S&P is at the 50 sma, right where it bounced of on the last advance. Support is at the January lows (1275ish). Continue to watch for tests of those levels and trade accordingly.
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