Good Morning, Traders. Interesting day in the markets on Wednesday, which provided intraday traders with lots of opportunities (mostly on reversals to the downside) and closed little changed in the major averages.  However, the market did breach an important key pivot in the process. Although all three averages closed green yesterday (an increasingly rare occurrence), the S&P 500 actually made new lows for the year during the trading day. If you check the chart below, you can see how yesterday's intraday low is lower than the previous low for 2006 set in the S&P during the first week of the year. The much maligned Nasdaq has of course been "down" for the year for some time now. I would say this is sure confirmation of bears becoming more and more in control as the trading year wears on. Even with the positive closes yesterday in the S&P and Dow, breadth still closed negative on the NYSE, indicating that declining volume outpaced advancing volume and the advance decline lines on both the NYSE and Nasdaq closed below the zero line as well. So if the market is trying to hammer out some sort of bottom here, so far its not doing a very impressive job of it. We continue to consolidate by time and as opposed to price and are on the lookout for some sort of relief rally which may offer more swing/position trade ideas to the short side.

Peter Reznicek is the Chief Equity Strategist and a principal of the Prana Fund, a domestic hedge fund, and ShadowTrader, a subsidiary of thinkorswim which provides coaching and education to its clients on both intraday and swing trading of equities. For a free trial to the full version of The Big Picture or to learn about ShadowTrader's other services, visit shadowtrader.net or send an email to preznicek@shadowtrader.net.