When the indices are facing technical resistance at the top of a trading range a pullback isn't a big surprise. That is especially so on a Tuesday in August when the only newsflow is President Trump complaining about the Fed and stating he isn't ready for a deal with China yet. There simply wasn't any compelling reason for this market to push into resistance at this point.
The backing-and-filling action is more a positive than a negative at this point. It is the best way for stocks to build a foundation for a push higher. As long as the recent lows don't come into play again this is just healthy trading range action.
Unfortunately, there isn't likely to be any major catalyst before the Jackson Hole meeting on Friday. Market players will start anticipating some reaction to the comments from Fed Chair Jerome Powell and that will give us some movement but in the age of algorithms it is the headlines that trigger the big moves rather than the anticipation.
It was a poor day of price action with the indices closing at their lows and breadth steadily slipping. On the other hand, it wasn't bad enough to be meaningful. The end result is trading range action that requires us to stay patient and wait for further developments.
Don't expect much to happen before Friday.
Have a good evening. I'll see you Wednesday.