How the markets are turning and churning

The equities markets appear to be confirming that they're turning over, while testing - or churning with - moving averages. Retail (RTH) in particular looks to be testing its 50 day moving average (dma) from below(while most sectors are above 50 or 20 dma support), just as its own 20 dma is threatening a bearish cross under that 50 dma. VIX popped above the channel it's been in for weeks, but found resistance at its 50 day moving average (dma), just as the XLF (financials) reached for support at their 50 dma. Gold poked to its lower Bollinger Band with GLD also getting 50 dma support, then put in a good bounce. Biotech was a strong sector, followed by technology generally, while retail and consumer discretionary lagged. Real estate and the transports struggled to participate in today's bounce, but look underperforming the broad markets' tepid performance. In currencies, the dollar held back while the yen popped strongly. Treasuries did okay, though not moving up with conviction at this point.

In the S&P 500, the market can have put in some (likely) or all (less likely) of a small wave 2 pullback up. That would fit with the idea of another effort up tomorrow to give nimble players one more chance to buy puts or sell calls into opex this Friday.* Granted, looking for a good bounce this week hasn't been well rewarded, which is a clue that the market may be weaker than many assume. If we see the early part of a "small" wave 3 down late Thursday and/or Friday, then Monday could be very interesting!

*Actually, most options traders avoid options that are so close to expiry because of the disappearing premium value, though if you can sell to open then you benefit from that inherent erosion of course. I don't give options advice but just making observations!

Assuming that the equities markets drop into the generally expected, and somewhat feared pullback, it will be interesting to see how a sector like biotech can really pull away bullishly. I'm pulling for that to happen - I just wonder how well it can swim against the tide.