This market has a little for everybody on Wednesday. The early action was dismal for the bears, the big drop was a gift for the dip buyers and now that the S&P 500 is back to positive territory the bulls should be happy.
It is very choppy and chaotic action out there but breadth is still solidly in the red and the number of new 12-month lows is growing again. There is some speculation that news of a Brexit deal was about 90% done and is helping but it is likely that it is just our old pals the computer algorithms playing games.
While the bulls are breathing a sigh of relief after the big bounce, that early weakness is a good reminder that this market is still struggling with the recent corrective action and has much work to do in order to repair recent technical damage. The response to the "good" earnings from Netflix (NFLX) and the lousy report from IBM (IBM) are not helpful either.
It is still early but this is developing into a very wide trading range. We have some clear support and resistance levels developing and it appears that there is some inclination to buy weakness. Choppy action will be good for traders with shorter-term time frames but it is going to cause some frustration for bargain hunters trying to find lows that will hold.
I'll be looking for some trade setups in the final hour but this is devolving into a market for day traders right now. There may be some longer term bargains developing as well but the risk of some more downside in the near term are high.