Tuesday's market action can be summed up very simply -- it is terrible. The poor ISM report in the morning gave the sellers the excuse they needed and it has been steady selling since then. There has been no bounce at all and the S&P 500 is hitting the lows of the day as I write.
The big problem for the bulls Tuesday is that there isn't any tweet on China trade to bail them out. Those constant tweets have prevented the bears from pressing their short bets but there is no great likelihood that is going to happen.
Breadth is running 1,750 advancers to over 5,600 decliners. The big difference in the action is that the indices are joining many individual stocks to the downside. As I have been writing for a while now, the underlying action has been terrible but the indices have covered it up to a great degree. That is not the case Tuesday as a number of stocks are going bidless.
When there is action of this type it is a good idea to remember the "First Rule of Holes:" if you are in one, stop digging. If you are losing money then take some stops and raise some cash. The selling may not be timely but it is a cheap form of insurance.
At this juncture, there is no reason to believe that the indices and individual stocks are going to suddenly find support. The bears have some momentum now and China trade news is not looking like it is going to be the savior today.
The good news is that there is going to be plenty of great stocks to buy down the road but for the best course of action now is to stop digging if your portfolio is in a hole.