As discussed in last night’s Briefing, the higher probability was for a move back to the downside to test or take out Tuesday’s low. That is exactly what occurred in today’s trading, except for the Russell. With that said, I have to expect a continuation of selling at the open tomorrow because the Indices closed at the low of the day. However, there were some structural components that were slightly stronger than on Tuesday. This could suggest a strengthening of the internal components that will lead to some type of rotation back up.
Look for signs of continued strengthening in the internals. Unless they continue to weaken, I expect we may be near a short term low. Do not buy this market yet. Wait for continued signs of strength and/or capitulation on the part of sellers. Since tomorrow is Friday, there may not be many traders who want to be long over the weekend. Therefore, it may not be until the first of the week that we see some type of rotation up.