Stocks continued lower on Thursday as Federal Reserve governors continued to talk rate hike in December.

The DJIA closed down 254 points to finish at 17,448 and is now down 462 points for the week. The S&P 500 finished lower by 29 points to close at 2045 and is down 2.54% for the week. The Nasdaq lost 62 points to close at 5,005 and is down 142 points on the week and the Russell 2000 was lower by 23 points to close at 2,045 and is down 3.75% for the week.

The S&P 500 Trust Series ETF(SPY) - Get Report volume came in at an above average 120 million shares traded (see chart below).

The sell-off appeared to take hold on Thursday morning and increased in intensity as multiple Federal Reserve governors continued to talk about raising the interest rate in December.

The one exception was New York Federal Reserve President Bill Dudley. Just last week he mentioned that a December rate hike was a "live possibility." In today's speech, Dudley was blaming the uncertainty surrounding a December rate hike on the data. Dudley said "that the economy is growing only slightly at an above-trend pace and inflation is too low relative to our objectives, suggests that we need to think carefully whether the time is right to begin to normalize monetary policy."

The markets appear confused as to what the Fed is going to do and it appears that volatility is going to be the common theme until the markets receive the news at the December policy meeting.

In the meantime, stocks appear to be trending lower. However, there are many large cap stocks that are extremely oversold. One such stock is Intel (INTC) - Get Report . (After being down seven consecutive trading days, I started a long position.)

Regarding SPY, notice how the ETF's price has gone higher since October 8 and the power bar trend has gone lower? This is a negative divergence. At some point, prices will fall under their own weight when fewer stocks participate to the upside. 

Expect more volatility as we near the December Federal Reserve meeting. Do not be surprised if the markets have a huge downside move if the Fed raises interest rates.

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This article is commentary by an independent contributor. At the time of publication, the author held INTC.