For the first time in this selloff, we are seeing some real panic and people finally dumping some of the momentum names. That's incrementally bullish. I was hoping for a gap down to start the day to make it a bit 'easier' but this is doing the trick.
The S&P 500 broke the yearly intraday lows, post ISM release and we're going to get a snapback rally at some point. People just don't want to put their hands out yet to catch the falling knife.
I pulled the S&P 500 chart farther out than usual just to show how darn far The Bernank was able to affect the market with QE2 nearly a year ago. Ironically, Jackson Hole Wyoming is only a few weeks away.
One of my favorite gauges - the percentage of S&P 500 stocks below their 50 day moving average - was at a yearly low of 14% coming into the day. Obviously this figure is lower at this very moment as we experience another selloff.
I'm more bullish today than I have been the past few weeks (again for at least a bounce). That said, crashes come from oversold conditions, so one must always have that in the back of your mind. (I'm not calling for a crash - it's a low probability event)
The perfect bull scenario is a bad morning, that ends with a rally to take the market to highs of the day. It's not always that easy, but if you see a day like that - it's a good thing.