Yesterday was pretty ugly with SPX losing $50 in a single day. But the futures were pointing higher this morning and traders moved the markets higher until about mid-morning. SPX weakened and hit its low for the day around 3:30 ET, but then it recovered to close at $1884, with a small two dollar gain for the day. RUT didn't fare as well, losing $7 to close at $1084. But that is consistent with recent trading, with RUT leading the broad markets lower. Volatility pulled back 1.2 points to 26.5%. Trading volume fell off today with 2.7 billion shares of the S&P 500 trading. Trading declined 1% on the NYSE and declined 6% on NASDAQ.

The Case Schiller housing price index moved to an annualized price gain of 5% for July, up slightly from June's 4.9%. The Conference Board's consumer confidence survey increased to 103.0 for September from 101.3. But this positive data was overwhelmed with concerns about a global slowdown.

I didn't expect the markets to retest the lows of the flash crash, but I was wrong - here we are. Interestingly, volatility remains lower than it was during the flash crash. Apparently, the big players aren't very anxious this time around. But that leaves us with the question of whether we are testing previous lows and rebounding or trading lower yet. I don't see the economic case for trading lower - but that betrays my presumption that rational thought guides the market.

Here is an interesting factoid I came across today: companies in the S&P 500 have issued fewer negative earnings pre-announcements and more positive earnings pre-announcements for the third quarter of 2015 relative to the past two quarters. So I continue to think our economy is plugging along, not the strong recovery we would like, but we are heading over the cliff either. So I think we are on the verge of bouncing higher.