A big gap down occurred today across the board. It looked like the bears finally had their gap down. All they had to do was hold this gap down and run lower all day. That would create a huge technical headache for the bulls and market nirvana for the bears. Within the first couple of hours those gaps were filled. The opportunity was lost. This doesn't mean things are hopeless for the bears, but it was a great opportunity wasted to be sure. When you get something you desperately need, and let it go so easily, it has to be somewhat deflating. The gap down was nearly a ten handle on the S&P 500 and that's not small.

There was a real chance here this morning for the bears but the bulls rushed in, anxious to get that gap closed, and were allowed to turn things a little green. I can't say I'm shocked, but I would be dishonest if I were to tell you I thought we'd recover today. I really didn't think we would. It had that bad feel, but it just wasn't meant to be at all. In these cases you normally get an opposite day the next day, but, of course, not always. A small gap up tomorrow that fails for the bulls would somehow make sense. The back and forth chop makes sense on that level. Bottom line for today was the huge lost opportunity for the bears. They had the bulls down, but were unable to keep it going. We remain nowhere overall.

The market is in a four-month plus chop. This is the worst thing that can happen to traders wince chop is equated with emotion. Most traders do very poorly in this type of market environment because nothing is directional. Whatever you do reverses quickly. You react and just when you sell or buy the opposite takes place again. In and out with lots of whip that causes more losing trades than winning ones.

It's a market that begs for light playing without getting involved in too high P/E stocks. Anything other than type of playing is probably leading to some bad feelings with you and your trading. Keep it light for sure. Avoid froth as I say every day and keep stops very tight. One day this market will gap down and not come back, but the onus for that is on the bears.

The sector that has me anxious is the financial stocks. They are not bidding with one after another losing their 200-day exponential moving averages. They then back test and fail. These stocks usually need to be above their 50's let alone below their 200's. Bad action there with the leaders such as Bank of America Corporation (BAC), Citigroup Inc. (C), Goldman Sachs Group, Inc. (GS), and JPMorgan Chase & Co. (JPM) all struggling mightily.

The market has held up in the past when the financial stocks struggle, but you don't want to test those waters one too many times. It would be good to see some of these stocks get a small gap up off their down trends that holds and turns the tide a bit more bullish. Some did put in decent potential bottoming candles today, but let's see if they can follow through tomorrow or very shortly thereafter. The market needs these stocks to find a bottom sooner than later if we are to power higher with any force.

For now we watch and play very lightly. A little exposure is fine but a lot makes little sense to me. Watch to see if the S&P 500 can close above its old horizontal high at 1897. Anything below is still just noise.

Peace,

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

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