Secret Buying Into Weakness

As expected, the Dow continues to find plenty of resistance around the 13,600 points level and today's retreat at this level dramatically increases the chance that this may be the start of the intermediate correction I have been talking about last week. This is especially so due to the fact that the market see such resistance in the face of such an amazingly positive jobs report last Friday. All short term indicators support an increase in short term bearish momentum and puts puts the odds in favor of an intermediate correction scenario. However, there is a little spanner in the clockwork here... investors and traders seem to be secretly buying into today's weakness, causing a surge in bond yields across the board while options traders depressed total equities put call ratio in favor of call options buying... In fact, we did see the market open deep in the red and then lifted throughout the day. As such, this isn't the time to buy into the intermediate correction scenario yet until further evidence.