Lets take a look at how the daily cycle charts look...
IWM (representing the rus'2000 small cap)
Dow
SP'daily5
Transports
Summary
It is starting to get a little hard to argue that we have bull flags on all the indexes. The sp' could certainly still be a fairly good bullish flag - so long as we don't break 1420.
The transports remains...a literal train wreck. As I relentlessly keep noting, a monthly close <5000 would be a red flag for October.
With the VIX closing 9% higher, today's daily candle looks pretty bearish for Wednesday, and indeed for the rest of the week.
My best guess is that this down cycle will floor around 1420 by the Friday close. I will most definitely close out all short positions if that is the case.
*the doomer bears looking for trouble in October really need to see the indexes put in a lower high (<sp'1474), before they can get overly excited about much lower levels.
A little more later.