The indices are hovering around the lows of the day and unless there is a major rally in the last couple hours of trading they will close lower than they opened for the first time in 12 sessions.
In a number of ways this action looks like the inverse of what happened in December. After 10 straight days of closing lower than they opened, there was an acceleration to the downside on December 24 and then a big reversal on December 26.
In January we had the acceleration to the upside on January 18 after an 11 day positive run and today is the reversal to the downside.
There is some nice symmetry to what is happening but the big question is whether this leads to more trending action. Will we see another run of 10 days in which there is a very clear pattern?
I believe that it is unlikely because there are very likely to be some news events that disrupt another trend. I expect the action to be much more volatile and for the trending action to dissipate.
I am looking for more downside in the near term and don't expect to see positive reaction to earnings later this week. There doesn't appear to be any news coming on China right away, and there are no signs of progress on the government shutdown, which makes me think the path of least resistance is to the downside.