The TRIN closed at a very high level today of 4.19. This has occurred only 7 previous times in the last 3 years according to my count, but 3 of those occurred last summer after the flash crash. We have two possibilities before us. Either today represented an acceleration of the short term downtrend, or today was a shakeout day and the uptrend will resume tomorrow.
As deep as the shakeout was in the SP500 today it is hard to believe the latter, but investor and trader sentiment is beginning to get much more bearish by several measures. A day such as today can oftentimes cement that bearish sentiment and allow for a sustained rally after the remaining weak hands have been shaken out. At the moment I am on the fence with respect to that question. I think the evidence points to a bullish resolution, but the chart patterns of individual stocks have actually deteriorated over the past week rather than improved. This leads me to think that there is much more work to do here before a rally can take off. I question, however, how a deeper correction can really begin at this point with so many looking for it.