Roxanne by the Police.

Or do you?

That's just it. The market is pretty tough to read right now. 

How will the US pulling out of the Iran deal play out?

The immediate response was gold, silver, and soft commodities rallying.

And equities, especially the Russell 2000 and Transportation, after testing the top end of the resistance levels, sold off.

But that was very short-lived.

Let's put aside the news and go right to the charts.

After all, the warning to not buy the strength until the resistance levels are pierced, comes from the price action and not the news.

I am committed to the charts, as once again we see the technicals precede the fundamentals.

However, today's immediate impact on price might only be temporary as the market digests the latest news.

Then again, if we look at the macro picture, we still believe that stagflation is a real concern for the next quarter and beyond.

So, what's real and what's reactionary?

The Russell 2000 (IWM) has to clear 158. Today's high was 157.83.

Today was also an inside day. That means IWM's price action remained inside yesterday's trading range.

That's a plus.

The way the range breaks tomorrow should help clarify if IWM's test of the upper trading range is it, or if the price just stalled with the news, and will rally through the resistance tomorrow.

Transportation (IYT), cleared the 50 DMA early on which put it in an unconfirmed bullish phase. By the day's end, it closed at 188.07 or just shy of the 50 DMA.

That makes 188.11 area pivotal to watch with 185 key support to hold.

Either way, IYT continues to serve as a reliable indicator for the perception of the US economy-perception that is, until the next round of economic stats emerge.

As for the rest of the reliable factors to watch…

The US dollar remains strong while the interest rates are flat.

Semiconductors, cleared 102 right on the close today. Nonetheless, it must hold over 102. If so, then the picture for technology improves in the near-term.