The weakness from this morning has not yet been bought into the afternoon. True, one day does certainly does reverse a strong move in 2013. However, I’d be remiss not to point out the potential head and shoulders top on the 30-minute SPY chart. Bears are looking for a failed bounce from current levels to short and see the pattern prove true, highlighted below.
However, keep in mind a concept we discussed throughout January–Bearish patterns within the context of a bull trend tend to be nasty traps to lure in eager shorts. We saw plenty of bear flags start to break down, only to stop and sprint to new rally highs.