Yesterday looked like the start of another run to the top of the trading range, but the market threw a surprise at traders today. Maybe more correctly, China threw traders a curve ball when they devalued the yuan. That has caused some analysts to think there may be more weakness in China's economy than previously thought. Industrial production and retail sales data come out for China tonight, so tomorrow's market could get hit again. SPX closed down $20 at $2084. RUT gave back $12, closing at $1211. The VIX tacked on one and a half points to close at 13.7%. Trading volume was up from yesterday with 2.2 billion shares of the S&P 500 stocks trading. But that only takes S&P volume back to the 50 dma. Trading on the NYSE increased 2% and trading volume on NASDAQ was up 8%.

Some analysts are convinced that this market is on the verge of tipping over into a severe correction, but their rationale isn't convincing. The argument basically boils down to "it's been too high for too long". I am more inclined to think we are stuck in the trading range until the Fed announces the first interest rate hike.

However, it is prudent to be cautious in the meantime. I nibbled at some SPX puts today, but I'm not risking much. This market is just too fickle and unpredictable.