The bulls really had the bears sweating on Wednesday... for a while. Before the closing bell rang though, stocks were as back-on-the-fence as they've been since early February. Now the bears will get their shot to take the control the bulls couldn't.
The daily chart of the S&P 500 below tells the tale. For a short while on Wednesday, the S&P 500 moved above a relatively important technical ceiling at 2371. It didn't last though. Once the market had a chance to review the minutes from the last Federal Reserve meeting after they were unveiled Wednesday afternoon (an excuse - not an actual reason, by the way), the buying reversed course... in alarmingly decided fashion. The index peeled back to that proverbial no-man's land. But, the market ended the day with bearish momentum headed into today's action. The VIX is knocking on the door of a break above 12.9 as well.
One more rough day for stocks could carry the index back below the critical support level of the 50-day line (purple) at 2345, as well as allow the VIX to push above the key ceiling at 12.9. Yes, the S&P 500 has turned around after doing so before.... just at the end of March, in fact. It's not all that likely the buyers would be willing to save the market from a selloff a second time the bears threatened to send stocks lower though.
Of course, just as scripted, the bulls are already winning the day early on Thursday morning. If the bears are going to take control for any meaningful length of time and do some real damage, they'll have to do more than they're doing right now.
That being said, they did exactly that on Wednesday. That is, the bears didn't clock in until late in the session, but they only needed a couple of hours to up-end what was going to be an important victory for the bulls. As was noted, Thursday is going to be a pivotal day. Any pivot action could last into Friday though, when the real test of commitment begins.