Traders Sell the News

The pause in rate hikes sparked a very minor rally before prices took a sharp plunge. This shows that the downtrend is firmly in control and that lower prices are to be had before we get a significant bottom. Nevertheless, QQQQ bears are a little over confident and are leaning too hard one way. The put/options ratio shows that we should get something of a bounce today. The day after the Fed meeting, stocks generally reverse much of the previous day's activity, so it is likely that today will see some price relief from yesterday's sharp move lower. Since the downtrend is still in effect, today's expected strength should help set up better entry points for taking on new short positions. Most stocks remain technically overbought and any strength should be used to open new shorts.