Hope you are not getting (too) comfortable

Equities look nice and strong, right? I just don't see it yet. Weeks ago, in this blog, I asked anybody to show me any market in history which had not tested a low that it had previously made.

Now, I'm a Forex trader, so direction of the equity markets is not important to me financially, but understanding direction is important because of the direct implications it has with the FX market. However, if you are an equity trader, you do want to see a retest of these lows. Here is a good summation:

From Mizuho's Steve Ricchiuto - "Now that the'Green Shoots' data has come into question, the broad equity marketindex is more likely to retest the bottom end of its perceived tradingrange than to push through the 875 double top recorded in January andFebruary. A reversal to the 750 area will help the market unwind anumber of the indices over-bought technicals. The fact that the 875level stalled the March-April advance as well increases the likelihoodthat the S&P will have to go back and retest the March 9th low of 676before a sustained uptrend can develop."