The market was settling into a pattern this week that saw the major averages climb off sessions lows each day, and it appeared the same would happen today when stocks began staging big moves higher.  Then, the bottom fell out from two breaking news items.

European Central Bank President Mario Draghi issued a stern warning to European Union countries ignoring budget rules.  With Britain in the midst of exiting the EU, and Italy in full defiance of the arrangement, there is a sense the whole deal could unwind.

Draghi comments:

• Rules must be respected
• Deeper integration
• Questioning rules damage growth

Shortly after that communique came word that U.S. Treasury Secretary Steven Mnuchin will skip the Saudi investment conference.

Dow Jones Industrial Average

On Tuesday, the Dow rallied to retrace 42% of the recent selloff, then it ran out of steam.  Now, the key support point for the Dow is 25,052.  Meanwhile, a larger swath of the market has settled into correction and bear market territory.

In the morning report, we will have more on how to handle oversold positions.  This is the time to look at fundamentals for difficult decisions, from closing some, to adding to others.  The key right now is to understand most of the action in the market has nothing to do with fundamentals or potential. 

Technically, the S&P 500 has come back down to retest its 200-day moving average at 2,768, today’s low was 2,766. 

• The S&P 500 is lower by 1.09% at 2,778
• The Dow is lower by 1.08% at 25,430
• The Nasdaq is lower by 1.50% at 7,527
• The Russell 2000 is lower by 1.52% at 1,565

Breadth:

• NYSE decliners 2,169 to advancers 773: new 52-week highs 9 to new lows 173
• Nasdaq decliners 2,179 to advancers 743; new 52-week highs 15 to new lows 89