Marginal Advantage

The bears now face the some of the same merit of trend obstacles the bulls faced earlier this year. With diminished expectations just about everywhere, it is harder to use bad news as a instrument for downward pressure. If the most bearish are right, a grinding phase may be the be best the bears can achieve. Yesterday's bad news on earnings may help reveal whether the trading environment has changed to where the greatest marginal advantage has moved to the bull side. If so, the participants are looking for opportunities and not relief, which makes all the difference in trends.