US Equity futures remain well off lows made late last night when S&P hit 2529, and rallied about 100 points into Europe’s open before giving back about 60 handles in the last few hours as the DOUBLE DIP appears to be happening. Treasuries are selling off, the Dollar is strengthening, Crude is lower down to 63.30 while Gold is fractionally higher.
Overall, given the near-term oversold conditions now present on intra-day and daily charts as part of the intermediate-term uptrend, and some sudden ramp up in concern with VIX going up 100% yesterday while Equity put/call is gradually rising, we should be close to at least tradable lows. We saw the FIRST instance of a huge imbalance in Downside volume yesterday with TRIN readings at 3.6, and important to watch for signs of divergences in New lows and improvement in advance decline over the next few days, which seems likely as the Percentage of stocks above their 10 day MA is down to 1.39% on SPX as of last night, while the percentage above their 50day is now at 27.8% just above 25%. Given that the fundamental picture hasn’t really changed, nor the intermediate-term technical picture.. and most of this has been volatility related. Markets should be close to bottoming in the next 2-3 days. Technically speaking it looks right to cover shorts and assume longs at 2550 down to 2500