At the end of this tale of a 2 market day,  it will likely just go down as another ‘whatever’ , Pt,II day as long as ~1117 (200ma) holds in the days ahead.   Many are placing 'too much' short term emphasis on the breakout 1130 as the critical level because it took all summer long to breach and now has failed to be support.    In this view, considering the market already had a bearish reversal day and hovered around SPX1130 on Wednesday,  it’s not that surprising the market is doing a ' whatever', re-visiting the summer range, breaching back to the upside and even closing below the top at the close.   

The tale of 2 markets , firstly, is the way the market rebounded after ‘overshooting’ in the morning.  It was a beautiful constructive move (showing resiliency of the tape) as an underlying bid overwhelmed what was an exaggerated and un-called downside open off Euro PMI data and Initial claims here.  Smart money knows Europe’s data growth will now slowdown in the footsteps of the way China and US did (while now these stabilize).    Recession fear mongering today surrounding Europe is just what we went through for a few months with double dip’ talk in the US as our ISM‘s came in weaker than expected after peaking.   Well, we know how that's turned out, don't we?  Also, post FOMC the ‘focus’ has turned to inflation data and away from data such as today’s Initial claims and maybe even some of the manufacturing numbers coming up in early October.   

The second tale surrounds the last 1 ½ hours and what looked like a spooked market.  There was nothing on the wires worthy of the sell off,  so likely it was just a technical driven sell off as shorts pressed and got a little more aggressive as a second coming of SPX1130 today was approaching.   If this is the sole case,  the market’s realization it was only technical should allow the market to make an easy move back above 1130.  Shorts are biased to be short term now and longs will buy up dip oppy’s, so a quick rebound move is very possible in a catalyst free and Q end environment.

In conclusion, even with the market down 15 SPX points from fresh recent highs there are hardly any meaningful pullbacks within DJIM Shadowlist favorites to pick back up, so we’d maintain the ‘lessen exposure’ stance taken since Wednesday morning as an insurance policy, if today’s action is more serious than the average back-filling/consolidation...,but mostly because individual equity favorites have not pull backed offering value.  No rush.  In all honesty,  a broad market pullback to 200ma or even 1111-1113 Sept gap on some overnight and/or weekend mini ‘accident’ may even be better than a quick rebound over 1130.