Todays declines were very important for the bears, although they were certainly nothing to get hysterically excited about. We still saw the SP' put in another close over the big 1400 level, so the bulls can still be pretty pleased with how things are going.
With the VIX still in the mid teens, it can still be said there is no major momentum right now, so the current down cycle will almost certainly not amount to very much.
Reasonable declines today, but...its nothing dramatic, and bears should not get lost in the hysteria of believing the current decline from the sp'1426 high is something major.
So..how low do we go in this cycle?
Considering the weakness in the market, with such low volume, and a VIX that remains in the mid teens, I find it very unlikely we'll break much below 1380. There are plenty of others out there touting 1370/65, I suppose thats just about viable - before the Bernanke speaks next Friday morning, but I'll sure as hell not want to be holding any short positions around that time.
From a cycle perspective, we could certainly fall for a good 3-5 days, so that'd get us to the middle of next week. How about VIX 18/19..and Sp'1375 ?
Right now, that'd be my best guess..pre-Bernanke @ the hole.
A little more later.