Technical Picture - Oversold

The markets opened on a mildly favorable note in the wake of Friday's afternoon bounce and talk of a gov't plan to takeover C's bad assets. That quickly turned into a head fake with a steady slide into midday resulting in a breach of Friday's lows and the underperforming Dow dropping to its lowest intraday level since Oct 1997. Minor consolidation followed by more afternoon selling and a weak close.

We are extremely oversold and normally we would expect to get a technical bounce soon. However, with all the rumors and speculation, I'm not holding out for much of a bounce until the failing bank crisis gets resolved.

As for the big picture, I see an inverse H&S pattern taking shape on the SPX weekly chart above.

Stocks reporting earnings in pre-market: FWLT, M, TGT, HD.