The bad news was that the indexes were down, breadth was 2,950-4,450 negative and the S&P 500 closed in the red for the third straight day. The good news was the selling was well contained, and there is still good support. The action was random and sloppy, but it looks more like consolidation than a topping process.
The weak close was not a good sign, but it looked like algorithm action and was not meaningful. The S&P 500 did not finish at intraday lows, which offset the late weakness issue to some degree.
The China trade drama dominated the headlines early in the day, but didn't have much impact. Overnight losses were recovered on positive comments in the Chinese press, but market players look like they were mostly confused and annoyed by the issue. Hope of a deal keeps a bid under the market, but it also prevents the technical action that would create a more favorable atmosphere. The only thing that really keeps the market up is fear that progress on the deal could be announced at any time.
There was some opportunity in individual stocks, but it was mostly day trading action. Momentum is not sustained and the risk of reversals is quite high. There just aren't many catalysts that are having a lasting impact.
Overall it continues to be a technically healthy market, but traders are frustrated as the market is mostly churning. What would help is stronger upside action or more aggressive corrective action. Instead, we end up somewhere in between and that frustrates both bulls and bears.
Have a good evening. I'll see you Friday.