Three points:

1. Seldom can a bottom be formed with only one day drop, so most likely today is not a bottom. Likewise if tomorrow the market closes green, then again not yet, the bulls hope is at least drop 2 days in a row. Please refer to chart 0.0.1 Market Top/Bottom Watch for why the market needs to drop at least 2 consecutive days to form a bottom.

2. Short-term is very oversold, so a rebound could be tomorrow morning and if no rebound in the morning then there'll be an intraday reversal. Just I'm not sure if the market could close green. Well, better not.

3. Gold, which is a traditional flight-to-safety, can be treated as a fear indicator besides VIX. Today we'll take a look a gold chart to see what it usually does before the market bottoming.

 

7.0.8 GLD and the Market Bottom, I've observed this for long long time, every time when market begins to drop, it drops too, eventually the market enters into a panic mode and then flight-to-safety trade makes the gold rise sharply. Take a look at the chart bellow, seems like it usually takes 5 days of rising gold to mark a bottom. Today, it's the day one of a rising gold.

GLDBottomWatch

7.0.1 Extreme NYADV and NYMO Readings Watch, both NYADV and NYMO are oversold today, the best case, rebound tomorrow, the worst case, the market will remain under oversold for another 3 days which approximately coincide with the 7.0.8 GLD and the Market Bottom prediction.

NYADVandNYMO

If the market keeps selling for another 3 days then probably there'll be a panic and so will rise the VIX. Let's have a quick look at VIX, by the way. 7.0.7 SPX and VIX Divergence Watch, SPX new low while VIX is still in a consolidation area, I think this is a negative divergence. Well, you can too consider it as a positive divergence, I for sure won't argue with you.

SPXandVIX

All above are mere speculation only, maybe the market is not worse than that, maybe the market is worse than that. The bottom line still is no panic no bottom.

 

7.0.3 Extreme TICK Readings Watch, this is the main reason for the possible tomorrow's intraday reversal. TICK closes bellow -1000, the 2nd day tends to have a lower low, but 10 out of 10 case, it had an intraday reversal, 7 out 10 cases it eventually closed in green.

TICKWatch

1.0.3 S&P 500 SPDRs (SPY 30 min), STO and TICK are very oversold so a rebound could be at least tomorrow morning.

SPY30min

1.3.7 Russell 3000 Dominant Price-Volume Relationships, 1391 stocks price down volume up which mean the market is oversold.

1.0.5 Major Accumulation/Distribution Days, as predicted, today is the 2nd Major Distribution Day. This means either we'll have a very good bounce or there'll be a 3rd Major Distribution Day.