Market Rolls Over On Light Volume, But Rates Rise

So the market did roll over, all the way to 1984.61. The 1988.40 gap was filled and the close was just four ticks above it. Volume was light.

Light volume going up is one thing -- bearish. But light volume on the way down is pretty hard to achieve unless the market is getting ready to turn around and head higher.

Still feeling the market wants to do just that -- head higher. But there are lower areas it can test first. 1970 is the area of the 38% Fibonacci retracement from the high measured off the 1904.78 lows. 1970 also has a small volume shelf too, so there may be another test of it, in which case it should not be seen as a big deal.

What would be a big deal, to me at least, would be a break of 1964.04. It would not spell doom, but it would be an early warning. Getting below 1944.90 might spell doom, though, and suggest that maybe a rather significant high was put very quietly at 2011.17.

As of right now, things would look a lot better if the market got back above 1992.14. But things can change as soon as it opens...

The only thing not to like thus far is the US 10-year yield which is back above 2.5% this morning. The Fed likes to pretend that it controls the bond market (helped along by the financial press), but it really only influences the shorter durations. If the Fed were to lose the 10-year at this point (resulting in higher yields), they could be forced to follow the market higher.

And those rates would not be rising for the right reasons.

Elsewhere, Apple unveiled its latest phone yesterday along with a watch. The New York Times was enthused.

Apple, Under Tim Cook, Is Back and Better Than Ever

Let the market decide.