The dip buyers have had good results recently when they jumped in early following European worries overnight. Unfortunately, for the second straight day, the dip buyers were stung badly when the bounce fizzled and we breached the opening low.
What was particularly worrisome about the action was that once we broke the opening low, the dip buyers completely disappeared. We couldn't even manage a little bounce at the close. All major sectors were red, breadth was poor at 1300 gainers to 4200 losers, and volume was heavy.
Technically, we fell back into the trading range that was in place from early August to mid-October. The breach of 1220 support on the S&P 500 was not a good sign, but we did manage to hold 1205, which is the 50-day simple moving average.
The big question now is whether two days of selling have killed this market. It has suffered some damage, but the wounds can be healed if those dip buyers regain their nerve and make a stand before flirting with 1200.