Written by Gary

The DOW was off 460 points at one point this afternoon and recovered closing at -173. Much volatility masked the true weakness the overall markets have and further downside is expected if not tomorrow, but in later sessions.

By 4 pm closed trending up, but on low sometime anemic levels. Uncharacteristically, the volume right at the close was anemic as even the bull BTFDers are scared and cautious in this crap shoot.

I sold the long ETF early this morning, licked my wounds, fortunately the loss was a very minor one. At the same time I bought another reverse ETF, so far so good. Just hope the timing is correct as you never know with this casino market. Whatever, keep your finger poised on the buy/sell button.

Having said that, later in the session thing looked like they may turn around and got out of that ETF. The hammer candlestick was forming and that possibly means after a downtrend, the Hammer can signal to traders that the downtrend could be over and that short positions should probably be covered. The Hammer is an extremely helpful candlestick pattern to help traders visually see where support and demand is located. It can also mean nothing and that is why I decided not to enter the fracas even in light of a further downside.

The volatility is what makes trading possible and 2011 marks the anniversary date when 98% of day traders left the markets and found a real job.

Our medium term indicators are leaning towards sell non-performers at the close and the short-term market direction meter is bearish. We remain mostly negativeand conservatively bullish. The important DMA's, volume and a host of other studies have now turned and that may be enough for some to start shorting. But now I am getting very concerned the current downtrend will get more aggressive. The SP500MACD has turned down, but remains below zero at -26.65. I would advise caution in taking any position during this uncertain period and I hope you have returned your 'dogs' to the pound. Having some cash on hand now is not a bad strategy.

Investing.com members' sentiments are 34 % Bearish (falling from 70%) and it seems to be a good sign for being bearish. The 'Sheeples' always seem to get it wrong.

Investors Intelligence sets the breath at 40.4 % bullish with the status at BearConfirmed. (Chart Here )

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 39.08. (Chart Here) Below support zone and apparently going further down. Next stop was ~57 and now it is ~44, below that is where we will most likely see the markets crash. We are seriously below 44 and need a reversal pronto as it looks like there is nothing to stop the fall until 25 and taking the markets with it.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 41.20. (Chart Here) In support zone and falling - doesn't look good. ~62, ~57, ~45 at which the markets are in a full-blown correction. The next stop is ~37.00.

StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 20.90. (Chart Here)

StockChart.com Overbought / Oversold Index ($NYMO) is at -44.34. (Chart Here)But anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.

StockChart.com Consumer Discretionary ETF (XLY) is at 62.96. (Chart Here)

StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at30.48 %. (Chart Here) Unless this downward trend reverses itself soon, we are going to see further downside. The next support is ~37.00 and ~25.00 below that.

StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10112. (Chart Here) Next stop is 9750, then 9250, and 8500.

The DOW at 4:00 is at 16142 down 173 or -1.06%.

The SP500 is at 1862 down 15 or -0.81%.

SPY is at 185.40 down 1 or -0.68%.

The $RUT is at 1072 down 11 or -1.02%.

NASDAQ is at 4215 down 12 or -0.28%.

NASDAQ 100 is at 3786 down 24 or -0.64%.

$VIX 'Fear Index' is at 26.25 up 3.46 or 15.18%. Neutral to bullish Movement

The longer trend is up, the past months trend is negative, the past 5 sessions have been negative and the current bias is negative and trending upwards.

WTI oil is trading between 82.40 (resistance) and 79.99 (support) today. The session bias is neutral and is currently trading down at 81.59. (Chart Here)

Brent Crude is trading between 85.98 (resistance) and 83.73 (support) today. The session bias is negative and is currently trading up at 84.08 (Chart Here)

Gold rose from 1222.24 earlier to 1249.94 and is currently trading down at 1240.10. The current intra-session trend is neutral and volatile. (Chart Here)

Dr. Copper is at 3.005 falling from 3.084 earlier. (Chart Here)

The US dollar is trading between 86.12 and 84.52 and is currently trading up at 85.01, the bias is currently negative and trending sideways. (Chart Here) Resistance made in Aug., 2013 (~85.00) has been broken and now is support. Support was tested this morning and has rebounded.

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