First of all, we're almost oversold. At this point it appears we should be oversold around Thursday. And the CBOE Volatility Index? It's on its way to getting jumpy. On the chart below I've circled the previous points the VIX looked jumpy to me. You can see this one also has the potential to develop into a jumpy VIX. It's come from a lower low which makes it harder to tell by a level what is jumpy. It is a "look" to me -- something that appears as though it is breaking out of a pattern and we don't quite have that yet.

Perhaps the bomb Baidu (BIDU - commentary - Trade Now) dropped after hours Monday will do the trick and get it jumpy.

I would also note that the McClellan Summation Index continues to head down, but the good short-term news is that it now requires a net differential of +4,100 advancers minus decliners to turn it back upwards. I start to think of this as oversold when it needs +4,000 or greater. At +4,100 it's getting there. A down day Tuesday could get it to +5,000, which would get it there.

By the end of the week I would start to look for an oversold rally, especially if the VIX gets jumpy and the Summation Index gets "worse."

However, as I expressed to you Monday, the Russell 2000 continues to be a problem for me. But there is also the Bank Index. Last week I said I thought it would bounce from 45-46 and it did, for one day. That was it. And now it is lower again. So thus far, I'm wrong. Let's not forget the banks got us into this mess and if they turn sour again it's a problem. A break of 44-ish would be bearish.