Overnight, Asian Markets were mixed and European markets were down. Today's SP500 opening continues the slide that began late yesterday afternoon. It looks like an impulse, so it could be that we are in the third wave mentioned as a possibility yesterday. If so, today should be strongly down. Yesterday afternoon took away the gains of the morning, and today's action has already wiped out most of the gains from Monday.
From about 10:56 to 11:15 or so there was a very low level corrective wave, retracing about 3 1/2 points. This should be a very interesting, and perhaps revealing day.
Yesterday, the DJI traced out a similar pattern to the SP500, but managed to end the day slightly positive. The two indexes are following nearly identical patterns. Here is a quote from this Morning's Zacks email.
The Dow rose by 8 points on Tuesday. But that doesn't really tell the story at all.
You see, Tuesday had all the tell-tale signs of a "Flight to Safety" day. That's when people cling to large caps in defensive industries while the rest of the market gets sold off. Certainly we can see this more clearly as the Nasdaq was down -0.86% and the small cap focused Russell 2000 took a more severe -1.75% beating. And just for good measure, bonds and gold rose too, which are classic signs of a safety trade.
If my read is correct, by the time the ultimate bottom is reached, the only safe haven will be cash.