Market Snapshot

Futures: 33 Advancing, 20 Declining

Dow 30: 2 Advancing, 28 Declining

S&P 500: 75 Advancing, 424 Declining

Nasdaq 100: 12 Advancing, 88 Declining

Russell 2000: 265 Advancing, 1567 Declining

The overall tone is quite bearish at this point in the session.  The indices are beginning to turn bullish as we move into the final two hours of the session.  Let’s take a closer look at breadth in our next post.

Morning Breadth Analysis

Major Indices continue to make new lows on the session.  The indices from strongest to weakest are as follows; /ES -0.72% @ 1238.50, /YM -0.72% @ 11717.00, /NQ -1.05% @ 2263.00, /TF -1.90% @ 749.30. 

All major indices are trading along the downtrend created during yesterday’s sell off.  Until this short term downtrend breaks, there is no reason to be extremely bullish intraday.  That said, this downside move may be worth buying into for an intraday trade if you are willing to catch a falling knife.

Why?

After putting up some seriously bearish readings during yesterday’s sell off (high of 4.48), TRIN has been fairly quiet during this morning’s selling pressure.  TRIN has stayed in a range between 0.75 and 1.50.  Remember, anything below 1.00 is bullish and anything above 1.00 is bearish. 

Basically, this selling pressure is not extremely convincing as the volume readings given by TRIN indicate.  TRIN says there is more volume flowing into decliners than advancers, but not in a huge way. 

On the flip side, NYSE Adv/Dec are not extremely pretty.  The ratio is approx 4:1 in favor of decliners (Dec). 

Dec

Decliners are looking toppy at the 2400 level.  They found resistance at 2400 yesterday, and they are pulling back off that level again today. 

Adv

Advancers had a weak start, but seem to be finding support at 500. 

All in all, it’s tough to buy this market intraday due to the violent downside action we have seen in the past few days.  That said, there are some interesting indications here and we haven’t even talked about the VIX…

The VIX is down approx 0.70% during this upside run.  It opened with a bearish gap, and is barely in downside territory.  That’s a tell if we’ve ever seen one…