Market Felt Heavy Today

Despite the rally in the last half hour of trading, the market felt heavy all day. The rally at the end of the day pared the losses in the SPX to -0.5%, but small-caps fell -1.5%, and large-cap tech declined -1.6%.

Moreover, volume rose today, making for another distribution day. So this is not the action we want to see. This is the second day of distribution in two weeks, while rallies have come on lighter volume. We want to see it the other way around.

On the plus side, the SPX did successfully test its 200-day support and bounce higher. But that doesn't mean it won't break this support in the near future.

We are also getting into an interesting juncture in terms of the upcoming FOMC meeting. This could mark a turning point in stocks. The question is whether it will mark a high or a low?

Bond yields fell today, despite the media harping about the inflation report. What this means is that the bond market is saying that inflation is a lagging indicator, and likely has peaked. But if the Fed keeps raising rates, it will probably force a hard landing.

I think they will pause. And if I were at the Fed, I would have stopped at 5.00%.