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The Ned Davis cash study showing up 19 / down 10 of the last 29 occasions was right on. You want the truth about what happened in the S&P yesterday? I'll tell you if you promise not to tell CNBC or Bloomberg. The reason the S&P rallied so much was because all the selling was done Sunday night into Monday morning, and by the time the 8:30 open rolled around all that was left was a bunch of weak shorts that put buy stops in above the market.

What did the S&P do? It took advantage of a thin-to-win environment on a holiday and ran all the buy stops up to 1709.75. Sure there were some headlines, but at the end of the day that is what caused prices to go up.

As for today, there are more buy stops to run, but today is also the weakest day of the week according to the S&P cash study: up 13 and down 16 of the last 29 occasions. We lean to a two-way trade, up in the first part of the day followed by a pullback. Buy the early weakness and sell the rally. Once a debt limit deal is announced, the pros will sell right into it. By the time that's news, it'll be old.

As always, use stops and keep an eye on the 10-handle rule. Don't forget to catch MrTopStep on The Closing Print video found under the OptionsTV page (top bar). We report directly from the SPX pits, wrapping up the day and positioning for trade tomorrow.

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