Equities have clearly broken down but have reeled in some of the losses from last week.
And here we sit, every trader out there looking for the Next Big Move.
Here's the thing-- the equity markets are undergoing what I'd call a volatility compression phase. The large and fast moves that were around recently are no longer present. Liquidity has comeback into the system, albeit on lower volume. But the fear is still present, as seen in the $VIX and $VXX, and every tick lower seems like it's going to destabilize the market again.
The moral of the story here is to tune up your noise filter. The 14-day average range on the $IWM peaked out at 2.81, and the past 4 days have seen an average range of 1.69-- that's 60% of what everyone is considering "the new normal."
Could it get fast and ugly again? Sure. But as for now, the markets are rangebound, attempting to frustrate traders looking for the Next Big Move. When the breakout traders are exhausted, that's when we'll see a true resolution out of this pattern.