While the bond market has been offering a dose of reality, the U.S. stock market couldn't be more clueless to the heightened risk of a global financial meltdown.
Some bears will look to short into the inevitable bounce -- and that's a logical trade as the market is broken and will likely roll over again -- but most traders that try to short into bounces do so too early.
Bounces after a sharp decline usually gain some momentum, but this time we're hearing tremendous concern among pundits that we're on the brink of a major shift, so I'm sticking with the action in individual stocks.
What's usually a slow month for the market has turned into one full of drama and volatility, as seen with the downs and ups of Wednesday.
Room exists for more bounce, but formidable overhead resistance stays at the 50-day simple moving average of the major indexes.
Making moves to make money as opposed to stave off a fear of losses is the smart play during market drops.
Monday saw some short-term extremes, as breadth was bad, more fear crept into the market, and 91% of the volume was on the downside on the New York Stock Exchange.
Just as we're entering peak vacation season, earnings season is now nearly over, the Fed is on hold for a month, China trade is a negative, and the Dow is down more than 765 points.
A major change in market character appears to have arrived, so focus on protecting your money rather than trying to make it.
The total put/call ratio zipped up to 113%, a reading not seen since early June, just as stocks were making a low, and the equity put/call ratio flew up to 87%, a reading we didn't even get to in May.