Stocks Surge - Is The Downtrend Still Intact

Today was a big day in the stock market as stocks gapped open higher and never looked back. I've been bearish on the market but unfortunately got stopped out of all my shorts right around the open this morning.

Looking at the above chart of the S&P you can see the market is right at its 50 day moving average and is still making lower highs which technically means the downtrend is still intact. If the downtrend is still intact you may be wondering why I exited my shorts prematurely.  The reason is because they simply stopped going down. Over the past two weeks as the market moved lower, many of my shorts were not acting right and were slowly moving against me. Other than the semiconductors, many of my shorts actually began to rally as the S&P moved lower which was a warning sign. I did however lower my protective trailing stops which all got hit on the gap up today.

The market has been difficult to trade  which is why I am now on the sidelines. Keep in mind September has been a very bearish month for stocks  historically so it will be interesting to see if this seasonal bias plays a role over the next few weeks.