As I said in my mid-day post yesterday, we are likely headed for another correction low. I expect the SP500 to touch 1008, the 38.2% retracement level of the entire rally, intraday before the correction is over. However, nothing I am seeing at the moment is telling me that we are headed for a crash as so many are predicting. This selloff has been severe in its volatility but the SP500 is down only 12% on a closing basis which is not atypical for corrections. I believe that we will see the low for this correction by early next week if not this week.
I will be looking for a positive divergence with higher lows in the McClellan Oscillator to confirm that a bottom is in.
There are some notable exceptions in individual stocks and any near term rally may provide a good short term shorting opportunity, but vigilance against a violent rally will be required.