The S&P 500 has been trading sideways on either side of resistance at the 2,000 level for almost two weeks. After a five-week rally you could say the market rally was tired. Short-term momentum indicators all look bearish with the S&P 500's two-day dip after moving sideways for so long.
Why were stocks weak today? The most common excuse was the rising U.S. dollar and new fears that the Federal Reserve might raise rates sooner than people expect.
If you recall last Friday's jobs report, which came in significantly worse than expected, supposedly put the Federal Reserve back in a wait-and-see how the data comes in mode. There was speculation that the Fed might push back any rate highs from Q1 2015 to Q2 2015, which would be considered bullish for stocks. Today' the story is that the Fed might remove the "considerable period" language from its policy statement next week, which might suggest the Fed could raise rates sooner not later. At least that was the concern today. Stocks might just be tired.
We are not adding any new trades tonight. The 1990 level was short-term support for the S&P 500. The next stop could be its 50-dma near 1970.