I’m not surprised selling has picked up.  Now, the question is whether yesterday’s lows hold on a closing basis (they’ve been violated intraday).  If the 50-day doesn’t hold, then we look to the 200-day moving average, which is right around the recently tested 25,500.

I think it’s important to close above the 50 day, which is 26,017 for the Dow, because in recent trading, the inability to hold has been like a trapdoor to the 200 day.  Interestingly, the last big challenge wasn’t about fundamentals but miscues by the Fed and media-fueled fears of a recession. Challenges that investors had to wait weeks to see the outcomes.  No recession, and Fed came around to play ball (after that wayward Dec rate hike).

The good news is we only have to wait 72 hours for resolution on the current Wall Street worry.

Dow Jones Industrial Average

Volatility Begets Volatility

When the market starts to gyrate, it tends to bounce around for a while, as spiking volatility feeds on itself.  The VIX volatility index is up 53% in the last two session, although, it is significantly below the December highs.

VIX

The great news with selling at the tail end of earnings season is I know what I want to own, and I’m thrilled to be able to buy names I missed.  On that note, we must continue to refine the buy list and see where talks and scuttlebutt around those talks take us in the next couple of days.