Hesitation at the Cross

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This morning once again saw a pop higher that is being faded as I write this. One its face, those of the bearish mindset will obviously declare a false breakout is upon us. However, the S&P 500 still remains above 1370, which marked the highs of 2011, in addition to all of its major daily moving averages. In essence, the market has been in “correction through time” mode for the better part of several weeks, despite making marginal new highs.

Calling a major top remains a sucker’s bet, though the bulls have yet to really take us on an energetic leg higher. The trading range levels on the major indices are starting to become a bit obvious, especially in the Russell 2000 small-cap led index. The lagging small caps could either be leading us down, or of course simply be consolidating before catching up in an explosive way. Consolidation patterns tend to resolve in favor of the prevailing trend. So, I believe it to be a bit too easy for bears to point out the Russell divergence as the grand “tell” for a roll over.

As the session progresses, I am looking to see if the bulls give it another go at breaking us higher. I see the bears are putting up a decent intraday fight. For all of 2012, though, those ursine traders have been without sharp claws. That will not last forever, but it can and most certainly does last longer than most market players and observers are willing to acknowledge.