Volatility returned and we finally got some movement as the Dow fell 344 points on light volume. The advance/declines were 5 to 1 negative. The summation index has turned down. The sell off was broad based with the TRAN taking the biggest percentage hit. I still don't think this is the start of something big to the downside but what do I know? The short term indicators for the S&P 500 are trending down but not completely oversold yet. We are about to have the 50 day moving average cross below the 200 day moving average on the Russell 2000. That is not a positive. We haven't broken the up trend line in the NASDAQ that began at the start of the year. So the bulls have that. I'm not sure about tomorrow as we'll see if there is any downside follow through. But I am pretty sure that Thursday will be positive. Whether it's GDP, earnings or whatever that should be an up day according to the work we do here. The question is whether we buy the SPY May calls on weakness tomorrow. The premiums there are pricey though. Gold was up $7 on the futures. The US dollar was higher and interest rates dropped on a flight to safety. The XAU had a fractional loss and GDX had a slight fractional gain. Volume remains light. My order for the GDX may calls remains out there but at this rate it won't get filled before Thursday. I might just buy the calls there above the price that I want and take my chances. However the light volume in the gold shares is telling me that there is no real demand there at the moment. I'll have to decide one way or the other tonight. Mentally I'm feeling OK. The VIX perked up today but did finish off of the highs for the day. The short term indicators have turned up with some room to go. The VIX remains below the 20 level which is another reason why I don't think a huge decline is in the cards here. If the VIX gets back above 20 then that would change our view. As is the usual story with this game, always plenty of questions with no easy answers. Asia and Europe were generally down. We'll see how it goes tomorrow.