Today the dollar is breaking to the upside and with the broad market trading at resistance (SP500) it has caused a very sharp sell off today which is still unfolding.
During market tops and bottoms investments tend to go every which way as fear and greed hit the market and everyone just buying and selling what they think is the right thing to do at the time. This causes mixed signals which is why gold is rallying with the dollar in a big way and bond prices are rising.
This is an emotional day for traders and investors around the world and we can see it in the selling of the SP500 today. I know many of you started taking small short positions the past couple days and this morning from my short term analysis and it is paying off now. That being said the market internals are showing short term oversold conditions and both the SP500 and Dow are still in an uptrend but showing distribution selling. Last January we had this same price action and the very next day the market bounced straight back up to the highs. While I am bearish on the market, I do think a bounce is very likely and I expect the pomo to try and help the market later today so it’s not such a blood bath today for stocks… only time will tell.