Did The Market Sell Off On President Obama's Bank Regulation Remarks?

I always have to giggle when I read the headlines. The Wall Street Journal and others reported yesterday that the markets sold off on new regulations. Maybe but I doubt it. The reality is that liquidity in this market has been waning for months. We highlighted that market behavior changed substantially four months ago. As of today, the market has officially not moved one S&P point in that period of time. The price discovery intraday has even been spotty at times within the S&P. Something I have only seen a few times. Ever.

The reality is 1150-60 is a huge resistance point. And guess what? Traders marched the S&P right up to 1150 and promptly dumped the market. As you can see on the graphic above, one of my main trading algorithms primarily based on the depth of the market has been on a sell for two weeks.

Did the President's remarks dump the market? HIGHLY unlikely. But then traders love to dupe the public......And the media. That includes the Wall Street Journal.