Market Ditched... Start of Downturn?

Market ditched strongly and unexpectedly today as a weaker than expected Durable Goods Orders hit the news. Indeed, with the recent volatility in the market along with the fact that the market has indeed come a long way already, it is not unusual to see traders take short term profit off the table. However, it is also interesting to note that instead of falling, bond yields actually rose across the board! This tells me that even though traders are selling out and taking profit, serious institutional investors are actually exiting bonds and entering on the weakness. The VIX soaring 13% in one day along with an overdone signal on my Star Trading System both tells me that this sell off isn't the start of a significant downturn and is most likely a one day thing. Indeed, such a huge reaction to such a volatile economic indicator is clearly an over-reaction. However, we will be watching the SP-500's 2040 support level closely. As long as that level holds, this bull trend is in no danger. However, yesterday's drop still took our short term trend indicator down to Neutral.

For now, the market turns short term neutral trend within an intermediate and primary bull trend.