DJIA, S&P 500 Trend Bullish vs. Nasdaq, Russell 2000 Trend Bearish

NEW YORK (TheStreet) -- The indexes on Wednesday continued their torrid rebound from the market selloff last Thursday and Friday. The DJIA and the S&P 500 have nearly regained all their losses from last week in three trading days.

The DJIA has gained nearly 400 points since Monday and the S&P has gained 46.62 points. The Nasdaq has gained 86.5 points while the Russell 2000 gained 20.33 points this week.

So, what does this all mean? It means that the DJIA and the S&P 500 are now back into Trend Bullish territory while the Nasdaq and the Russell 2000 index are still firmly in Trend Bearish territory. Remember, Trend is a three-month or more time frame, according to my algorithm process.

Thus, we have now re-entered a two tiered market environment again, with the DJIA and the S&P 500 vs. the Nasdaq and Russell 2000. If you have been a follower of my articles, you cannot have two different markets for any length of time. It just does not work.

From a trading standpoint, traders must understand that volatility has been a theme that I have written about in 2014. You are witnessing that stock market volatility play out right now. This stock market has no memory from day to day.

This holiday shortened trading week is also playing a role. I fully expect trading volume on Thursday to be very light. Wednesday's trading volume was the lowest this week, well below the 50-day moving average in the S&P 500 Trust ETF (SPY).

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