Last week's trading was certainly stressful. Monday brought a big sell-off and prompted talk of a mega-correction. Who would have guessed that we would have recovered  all of those losses and then some by the end of the week? By contrast, today's trading was slow and mostly sideways. SPX closed at its high for the day, $1800, up $3. RUT gained $2 to close at $1119. The markets mostly chopped sideways and really only moved into the black for about the last two hours of trading. Trading volume fell off from Friday's exuberance with 2.1 billion shares of the S&P 500 stocks trading. This is the first time SPX volume has fallen below the 50 dma since January 3rd. Trading volume dropped 9% on the NYSE and decreased 12% on NASDAQ.

I found today's slow sideways and slightly positive trading to be encouraging. After such a strong rally Friday, I was concerned traders would come in Monday a little scared that we had moved too far, too fast, and start selling to lock in gains. The pattern of trading today builds additional support for the case that this most recent downturn will be a pullback similar to the several we saw last year rather than a dramatic correction of 10% or more.

There weren't any significant economic reports today. Many traders are waiting to see how FOMC Chair Janet Yellen does tomorrow with the House and later in the week in the Senate. But it seems unlikely that we will be surprised by any of that testimony. After all, she has been the Vice Chair during all of this quantitative easing under Bernanke; a new direction isn't likely. But we will wait and see if there is a surprise.