The afternoon sell-off started early and the bulls had enough time to pull off a decent bounce going into the close. Quite a few stocks, like Apple, were hitting fresh lows before bouncing back sharply. The bulls showed signs early this morning when the market bounced back quickly from another lousy Philly Fed number but uncertainty in Greece and elevated CDS in the Euro-Zone stalled the momentum.
There was even some rumor that a “big technology fund” was liquidating. There are a few signs that the bounce could continue with the VIX spiking close to 25, but the bulls would have to overcome the recent string of down Fridays. We also have the end of option expiration and the FOMC rate meeting next week as potential catalysts for a bounce.
BTW — The daily SPY models have been on fire (included as part of the ETF Rewind Pro subscriber service) during the recent high and rising Historical Volatility environment. They probably would have saved traders close to 500 Dow points when they went to neutral twice recently right before big next day drops.
