Second, too many traders have been waiting for this break and put options sales were through the roof yesterday as a result of the break. When too many people in the market are looking for the same thing, the perverse nature of the market is to deny the crowds their satisfaction. We scanned everything today and there are just not good chart set ups out there despite the QQQQ breakdown yesterday. Longs are very likely to be frustrated as rally attempts should now get turned back at resistance. Likewise, eager shorts are likely to be frustrated today as follow through from yesterday's breakdown is unlikely. Very often when a major breakdown occurs, the underside of support is tested before the trend can establish itself. Evidence points to a test of resistance that gives false courage to bulls and frustrates overly anticipatory bears before the market can move lower.
We highly recommend not forcing a trade here. When stocks are not setting up the best policy is to wait until they are. Let the other guys struggle against the trendless environment and save your cash to take advantage of the situation once the smoke clears.