I was encouraged a bit yesterday with a small bounce near the close; for once, we didn't close at the low of the day. Today SPX opened above yesterday's close and proceeded to recover a large proportion of yesterday's losses - too good to be true. The last hour of trading was ugly, resulting in a lower close at $1868, down $26. RUT also traded down $8 to close at $1104. The VIX peeled off nearly five points to close at 36% - still very high, so we are clearly not yet out of the woods. Trading volume began to contract with 3.7 billion shares of the S&P 500 companies, but the 50 dma is 2.3B, so this remains an elevated level. Trading volume declined 25% on the NYSE and also declined 26% on NASDAQ.

SPX is now down 9.3% for 2015 and this correction stands at a negative 12.2% since the recent high on July 20.

There wasn't any significant economic data reported today. The Jackson Hole symposium comes on Thursday and I am sure we will hear many sound bites from the participants and speculation from the analysts. The commentary will be breathless in the aftermath of Monday's flash crash.

It's too early to say we are near a bottom, but the initial signs are encouraging. At least the free fall ended today. But tomorrow is another day...