Thursday’s pattern in the sector summary table is clear. The stronger sectors moved up and the weaker sectors moved down, but nothing moved more than a percent either way.

The Semi’s (SMH) broke out to new highs but no one followed, and in fact, the QQQ closed on its lows, and under the prior day’s low.

This kind of discord needs to be worked out for the markets to move higher. Furthermore, the Modern Family was clearly in the mood to rest. All but the SMH closed lower.

As a result, Thursday was another consolidation day, but with vibes of nervousness, because…

TLT’s and XLU were strong and closed near the high of their day. This is could have been a very short-term oversold bounce, or a more defensive posture in the market, which is not consistent with SMH breaking out to new high.

Perhaps the action in the market’s the ‘fear gauge’, VXX, explains yesterday’s consolidation best. From Monday’s open until Wednesday close the VXX dropped precipitously and made new multi-year lows. This would suggest a very complacent market, or a sharp increase in optimism.

There’s still plenty for this market to worry about, so Thursday was the day to do that.

One day does not make a trend, but as I highlighted several weeks ago when the markets were at the low end of their range multi-week ranges, when markets break a significant level and quickly reverse, you should watch out for a short-term trend change.

If the SPY, QQQ, and IWM experience a 30-min O.R. breakdown on Friday, I won’t buy the dip on Friday.