I have a confession to make. When I said I expected ups and downs I did not expect the market to be down 3% on Wednesday. And yet I can't help but think we should still rally before we come down again.
Let's start with the TRIN, or Trading Index. It soared to 3.6. You might recall from just two days ago that this indicator does not get up and over 2.0 very often, so for it get to almost 4 is an even rarer event. The last time it was up here it got to 3.57 on Feb. 5, 2018. That was in the midst of the Volatility Index Implosion.
On Feb. 5, the S&P was down 113 points. The next day it rallied 46. And then it came down again (you do see a theme here, don't you?). We also rarely see so many high TRINs so close together. What it tells us is there has been an awful lot of selling this week.
We also know how much selling there has been, because 95% of the volume was on the downside. On Aug. 5, there was just over 90% of volume on the downside. Typically 90% down days lead to short-term rallies.
Then there is my Oscillator, which is oversold. The Nasdaq Momentum Indicator is also oversold. Now even the "what if" for the McClellan Summation Index is back to oversold. That's because it now needs a net differential of plus 2,900 advancers minus decliners to halt the decline and once it needs plus 2000, it is into oversold territory.

The put/call ratio jumped back to 124% and the equity put/call ratio moved back to 84%, so we know in addition to the selling that was so heavy on Wednesday, there was quite a lot of put buying.
Yes, I know the yield curve inverted. And I even know there are tons of statistics out there telling what the market does in the months thereafter, and the economy after that. But I also know we had some minor "yield-curve inversion" hysteria. I wouldn't call it panic, but hysteria.
So, yes, I still think we rally and then come back down.
Why back down? Because of those intermediate-term indicators. The Volume Indicator is at 46%. The low 40s makes it oversold. The Hi-Lo Indicator for Nasdaq moved down to 27%. Under 20%, and it gets oversold. The NYSE's Hi-Lo Indicator is still over 40% though.


Also the number of stocks making new lows increased again, so that removes the possibility of a positive divergence.
The intermediate-term Oscillator, where I use the 30-day moving average of the advance/decline line, is still not oversold. It's still difficult for me to see when that might get to that point. It is possible it would arrive sometime in the week or so after Labor Day.
So that's where I stand, in the same place I have been this week (and last week). I think we can and should rally and then come back down.