It Wasn't That Good

If yesterday was as good as it was gonna get, it wasn't that good. Take note.

I'm not talking about gains from an overnight gap up. I'm talking about what happened once price saw the "light of day" in the regular session. Across the board -- Dow, Nas, Rus, S&P -- prices fell from their highs. Nasdaq and Russell printed the worst candlesticks, a solid red Marubozu and a shooting star respectively. Both are strongly bearish.

Ironically, the chart of the 10-year note printed a shooting star as well. One would think that all the hype about Yellen being such a Dove would have caused treasury prices to soar and yields to tank. But the opposite occurred. I'm still in the camp that sees a strong bounce in treasury prices and a fall in yields over the short term. But the market's take on the Summers news was interesting.

The VIX backed up immediately at the open, a sign to get to work. All I did for most of the day was buy weakness on the VIX using Nov. 19 calls. At the end of the day I capped it with a small position in SPY 170 calls.

The stop on the calls is 1685.78. Below there, the gap at 1671.71 is the first target. Lower prices could certainly occur.

To the upside, 1709.67 and 1720 are areas of interest.

Some additional stats. There were just 231 new 52-week highs yesterday compared to 519 back in April and 671 back in 2010. A/Ds started the day at an impressive 19:1 and petered out to 2:1 by the close. Up volume was 36% lower than it was during the initial thrust off the June lows, having declined ever since. The market is getting tired.

The Fed starts a two-day meeting today. I could care less who the next chairman is. It won't make one bit of difference in the overall scheme of things. For now all that matters is new gadgets in bright colors.

Breaking news on Marketwatch: NEW IPHONES HIT RETAIL STORES AT 8AM FRIDAY.