The market did manage a tiny bounce in the final minutes of trading to take it off the lows the day, but the bears had their most dominate day of selling since the uptrend began on Sept. 1. Breadth was very poor at nearly five losers for each gainer and volume picked up quite a bit on both exchanges. Retailers appeared as though they might buck the trend, but they, too, faltered as the day progresses. All major sectors finished in the red.
The biggest negative we have is that the downside momentum gained traction today and we just don't have much underlying support. Obviously, the dip buyers have completely disappeared and it is still a bit too early for the value buyers to appear. The good news is that we are a bit technically oversold and many individual stocks are hitting some support levels.
I suspect the General Motors IPO, which is supposed to price Wednesday night and start trading Thursday, may help to improve sentiment, at least for a little while, and give us some relief bounces. Given how weak the bounce attempts were today, we'll have to be on the lookout for more failed bounce attempts down the road. But if your time frames are short enough there may be some tradable, oversold bounces.