After Monday's poor action, market players were not prepared for another buying spike, which probably intensified today's action. The market has been on a rollercoaster ride the last four days, and the rush to reposition with each swing only makes it worse.
Today's action was the complete opposite of yesterday's. The market trended up strongly before a little late selling, but volume was strong and breadth quite good. Even Apple (AAPL) managed to come back to life and helped the Nasdaq to outperform for a change.
The problem with this sort of market is that it is tough to apply logic to it. When we see alternating days of good and bad action, you have to be ready for anything and not be surprised if the pattern continues.
The bears will say that this inconsistent action is a sign of indecision, which means a turning point is near. The bulls will argue that it's just profit-taking and consolidation, which makes for a healthier market and sets the stage for more upside.
My view lately has been to stick with the bulls until there is a reason not to; today's action certainly did nothing to change that thinking. The bulls continue to have the edge, but this pattern of action suggests more chop to come.
Have a good evening. I'll see you tomorrow.