Dr. Kris'  Instablog

3:00 pm ET: It appears as if the bulls are losing traction and fast. As of this writing, internals are turning increasingly bearish with the negative mean VWAP sinking to -116. The VIX is now breaking the critical 20 level as the Trin nears its high of the day near 1.5. The one ray of sunshine is that as the selling pressure increased, so did the buying pressure (as shown by the increase in the mean positive VWAP). But will the hopes of the bulls be dashed if Apple (AAPL) happens to disappoint investors when they report earnings today after the bell?

Should the bears prevail for whatever reason would mean that we could looking at much further downside. Right now the SPX is testing the 1325-1330 support area. The DTX just punctured 500 support with the DJIA also breaking support at 12600. The next stops for the major averages are the following: SPX 1300, 1250; DTX 475, 450, 400; DJIA 12400, 12000, Nasdaq 2750, 2600.

In commodity news, nickel (JJN) hit a new low as did the metals and mining etf (XME) which also broke a support level. Clean energy funds are suffering as ICLN, PBW, and PBD sank to new lows. Any respite in the commodities space will probably not be seen as long as the "risk-off" trade is in effect.

Trade Note: CNBC noted today that the major sectors are all more than 10% off their 2012 highs. Anything down more than 10% means that it's in correction mode and with all of the major sectors down this much, the probability of a recession increases. Should the VIX close above 20 would make a good case for the bulls to begin hedging their bets, if they haven't already