The market continues to crumble for a variety of issues, taking a collective toll on market psyche.  Right now, bad news is horrendous news, and good news is bad news.  That’s how emotions work.

The following are the contributing factors to the current selloff:

• Federal Reserve
• Strong Dollar
• Peak Earnings
• Slowing Economy
• Trade Issues
• War in Washington
• Profit Taking

Some of the biggest losers in the session are stocks that are up huge for the year, so there is an element of profit-taking, or even forced selling of winners in margin accounts to pay for losers and cover margin calls.  Conversely, many of the stocks trying to rally have had bruising years to the downside.

Interestingly, the first rebound attempt was focused on the biggest losers.  Facebook (FB) has attracted buyers all session long, and chip makers have put in a big bounce, led by Applied Materials (AMAT).

Investors are making their moves on deeply oversold names.  Kulicke and Soffa (KLIC) posted a strong earnings beat but pointed to “relative softness” for guidance below the street in the current quarter.  The stock opened at a two-year low, having since powered higher on three times its average daily volume.

Also, defenders are helping stocks like Amazon (AMZN), with reiterated buys from Jeffries and Wells Fargo, and a Nvidia (NVDA) buy rating from a former bear on the stock, Citron.

Perhaps, the action in retailers’ underscores market psychology the best.  Increased volatility and overall downward bias means closing out stocks on good news.  Even with the big selloffs, many key retailers are still up big this year.

I think the rebound attempt happened too early in the session, but these are great when it comes to building and refining our buy list.

The market is oversold, but that doesn’t mean it can’t move lower.  On that note, I’m licking my chops and getting ready to pounce.  If you are not currently a Hotline subscriber, this is an amazing time to get started.  Simply click here.