I was closely watching the trading action in the U.S. equity markets this morning following Monday's 1,000 point drop in the Dow.
Over the past year, any dip in the S&P 500 along the lines of a 3% pullback was quickly swallowed up by dip buyers who eventually drove the index back to all-time highs. I anticipated dip buyers to jump back in on Tuesday morning and, while we saw a small pop at the open, sellers quickly took control again.
The fact that stocks have faded rapidly on Tuesday morning indicates to me that there could be a lot more selling ahead. A fairly quick move back to 3100 on the S&P 500 seems well within the realm of possibility here.
In the video above, I talk about the early trading action in the S&P 500 and what it could mean moving forward.
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