Still heading lower as the Dow fell 308 points on light volume. The advance/declines were around 4 to 1 negative. The summation index is moving down. The S&P 500 has made it to the up trend line at 3975 and is holding on for now. Some kind of bounce should come in here as the S&P is short term oversold and we are right at the level of support that we were looking for. The 50 day moving average is also trying to stem the decline. If things don't hold on here 3900 would be the next spot to look for some reprieve from the selling. We thought that the bear was dead but perhaps it just went into hibernation during the summer rally. The inverse head and shoulders pattern on the S&P 500 daily chart is still a possibility however at this rate of decline it isn't going to happen. Gold was off $15 on the futures. The US dollar and interest rates remained steady. The XAU fell almost 3 points, while GDX lost 1/2. Volume was average. The gold shares are short term oversold and have broken their near term level of support. We're still looking at the GDX October calls but are not convinced this is the right idea at this time. Mentally I'm feeling OK. The VIX finished with just a slight gain despite the market decline. Short term overbought here. Not sure what to expect from the VIX next. Tomorrow is the last day of the month so there might be some position squaring going on. The continued light volume is a factor of the lack of buyers and also players on one last summer fling away from their desks. We do have the jobs report on Friday to deal with. Asia was mixed and Europe generally lower overnight. We'll be looking for some kind of bounce tomorrow.