Looks like the S&P 500 Index wants to test the 1245 intraday low it hit on May 24. If that breaks, we'll probably get the 10% decline down to 1200 that would make this an official "correction."
That said, gauges such as the put/call and breadth are extremely oversold in the very short term, meaning quick snap-back rallies are possible. But just as last week's rally back up to 1290 did little more then alleviate the oversold conditions, the market still seems to be in a very precarious position.
Expect the trend of higher volatility to continue this morning.
P.S. Will you be there when Cramer makes his next move?
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Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
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