It remains to be seen if the pattern will hold or not. The indexes remain extended relative to their underlying moving averages. For the S&P 500, the first moving average that comes into play is the 20-day which is sitting near the 1380 level. The SPX is currently trading at 1390.
Asian markets were mostly higher overnight, but Europe is lower today on disappointing PMI data. The euro is also lower while the dollar is firm.
Commodities are weak across the board, with oil prices down to $104.60, natural gas prices down 3%, gold prices lower to $1635, and silver and copper prices down as well.
In corporate news, Fedex (FDX) and Lululemon (LULU) both beat earnings estimates but gave soft guidance and their stocks are lower. Dollar General (DG) topped estimates and raised guidance and its stock is higher.
The 10-year yield is easing back to 2.27%; and the volatility index is spiking +7% so far to 16.25.
Trading comment: It's too early to comment on the action, as we have to see if the bulls step up as usual and rally the market into the close. If they do, then I would stick to my comments that today (day 3) could market another short-term bottom in the pullback sequence. But if we close at the lows it is very possible the market still has some work to do on the downside before finding support. Big picture, I would expect some underinvested managers to use the opportunity to put more cash to work ahead of quarter end next week.
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