Market Position: Neutral-Bearish



Tuesday’s modest recovery (on light volume) from Monday’s sell-off suggest either a pause in the correction (with more to follow) or the completion of a minor retracement that will precede new highs. Wednesday will be key to assessing the next short-term moves. Positives include RSI(14) bouncing above the 50-line (SPX and Nasdaq) and VIX deflecting from resistance near 27.50. Negatives are the light volume on today’s bounce, the weak trend in market breadth (and divergences we have seen since the beginning of August), and resurgent strength in staples (at the expense of consumer discretionaries).