Rally? So What? The Stock Market Is Still Trending Bearish

NEW YORK (TheStreet) -- I missed out on all the downside fun Tuesday. As the DJIA, Nasdaq, S&P 500 and Russell 2000 are all now in "Trend Bearish" territory, it was no surprise to see the markets get whacked.

As I have been writing about for quite a while, Tuesday's total U.S. equity market volume was up 15% versus its one-month average. Again, on down days the volume accelerates and on up days the volume decelerates.

Wednesday was an up day in the markets as we saw a small relief rally with decelerating volume. The S&P 500 Trust Series ETF (SPY) saw volume come in at over 94 million shares. That was down from the 152.6 million shares traded on Tuesday.

The DJIA had a gain of 13.87 points to 16443.34 and the S&P 500 saw a fractional gain to 1920.24. The Nasdaq was higher by 2.22 at 4355.05 and the Russell 2000 gained 3.99 points at 1125.55.

The machine-driven hedge funds now are looking for opportunities to sell the market as it goes higher. This is quite the change from the bubble days of just a couple weeks ago when the hedge funds were looking to buy any selloff.

As a trader, you need to adjust your way of viewing the market. Many support levels have been broken to the downside. Three of the four major indexes are in bearish territory, both from a trading perspective and a trend perspective. This needs to be recognized.

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