The market's been paused in between the S&P 890 and 895 level. The XLF is leading down again and is working its way lower. If 890 breaks, we are likely headed to the 878 or even 870 area which is quite a ways down. This is looking more and more like a bear flag, and if so, the area just above 870 would be the target. Below is a 5 minute SPX chart. If it were to break upwards, it would probably come quick, but the action today doesn't look bullish, although the VIX is not rising a commensurate amount so there are mixed signals here again:
I didn't mention it earlier, but yesterday produced a small movement on the McClelland Oscillator which means that a large price move is coming today or tomorrow. One hundred points off the DOW is large, but it may not be large enough to fulfill this.
The short term oscillators are still oversold, be careful with open positions.
I’m going to recommend a couple of Mish’s articles… I STRONGLY recommend that you read them both and wrap your mind around both the employment situation and stock market valuations. His take on Price to Earnings ratios (P/E) is the correct one. Do not believe the usual claptrap about stocks being on sale, they’re not.
Again, these are two important articles (his site takes a while to load, be patient):
Is the Stock Market Cheap?
Jobs Contract 12th Straight Month
Here’s a little tuneage for the BLS… “So… so you think you can tell?”
Pink Floyd, Wish You Were Here (So You Think You Can Tell)