Nothing But Red

Rough day. The SPX declined -1.3%, the COMP fell -1.7%, and the RUT (small-caps) fell -2.0%. Volume levels rose on the session, making for a distribution day. The selloff caused the SPX to close below the low from the rally day on June 29th. That pretty much kills the current rally attempt. Now the question will be if the June lows hold.

But sentiment is again reaching extreme levels rather quickly. I think that sets us up for another tradable bottom in the near future.

To wit, the volatility indexes really spiked today. The VIX shot up +23%, and the VXN rose +12%. The put/call ratios also spiked higher, and the TRIN closed at 2.25. These are all consistent with panic selling.

The conflict in Israel really exacerbated the selling today. Oil closed at a new record high ($76.70) and the 10-year yield fell 3 basis points to 5.07%, below it's 50-day.

While it is hard to predict how long it will last, history tells us that these events usually turn out to be better buying opportunities than selling.

I have raised a little cash, but will be looking for opportunities to put it to work.
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