Well, that elevated quickly. We finally have the big gap down opening, after countless selling of the gap up opens over the past 2 weeks. It looks panicky out there, and I put in some small buys in the premarket into the carnage. Holding my nose and buying. It is not for the faint of heart, or for the scared, and it looks risky, but we are close to 2700 support, so I like the risk-reward at these levels.
It is notable that in the premarket, the VIX is trading at 24.18, as I write, which is lower than the levels on October 11 and October 12, when the SPX traded higher than current levels. So at least the VIX isn't getting totally out of control.
We have earnings bombs from CAT and MMM, which was foreshadowed by their weak charts. It looks like de-risking ahead of the heart of earnings season, which definitely lowers the bar for upcoming earnings for the big names like MSFT, AMZN, GOOG, INTC later this week.
I am expecting buyers to step in here at the US cash open and should see some reflexive buying off the big gap down open after the weak close yesterday.
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