Before the Open (Aug 20)

Good morning. Happy Friday.
The Asian/Pacific markets closed down across the board – there were a couple 1% losers. Europe is currently down – there are several 1% losers there too. Futures here in the States point towards a gap down open for the cash market.
Yesterday was an ugly day. Every sector I follow (there are 100 of them) closed down. Every Dow stock lost ground. About 90% of the Nas 100 fell, and all but 2 S&P 100 stocks dropped. Only 15 stocks from the S&P 1500 closed in the top 10% of their intraday range while more than 900 closed in the bottom 30%. Decliners beat advancers better than 9-to-1. After an extended move down it may have marked the end of selling pressure, but considering the market was neutral when it happened, there is likely to be follow through.
None of the things that needed to happen to signal the market was gaining strength happened. The small caps are still lagging. Banks are weak. Volume is stronger on the down moves than on the up moves. The time of year tells us the bulls will struggle. The market is reacting negatively to bad news. None of these items are good.
Here’s the 60-min SPX chart. A support trendline was broken last week. Now a rectangle is forming – this is a bearish set up.

When the week began I said I was hoping for a washout to force the indicators into oversold territory. After yesterday, the odds of this happening went up.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings Reports
this week’s Economic Numbers