Trader's Elevate Markets On Hope

My thoughts on today's action is that today was simply an oversold bounce that was likely to happen with or without a catalyst, but was ignited when some fiscal cliff hopeful resolution hit the news wires. I don't trust a low volume news rally based on hope and with the VIX trending higher on the 60 minute chart I believe this market is going lower.

Maybe tomorrow is going to be a bullish day pushing the Vix back to $18-18.50 range, setting up a meltdown in the markets next week when nothing is resolved with the fiscal cliff or traders just don't like the resolution. We also have a full moon tomorrow but given how choppy the markets have been I don't really have any clue as to how that's going to effect the market.

We've simply rallied back to resistance with today's late bounce. The most bearish thing that could happen tomorrow is if we gap up at the open as we will most likely fall after that as we've come too far too fast. No market goes straight down or up so days like today are actually bearish as it gives the market time to work off any oversold conditions. I continue a 3 steps down, 2 steps up market as my proprietary indicators remain very bearish.