SPX lost another $26 today, closing at $1946. SPX has now broken a couple of key support levels. Is the low of the August correction at $1910 the next support level? SPX set a closing high at $2011 on September 18th. Today's close is a correction of 3.2% from that high. That doesn't seem like much of a pull back, but consider RUT - a completely different story. RUT closed down $16 at $1085 today. RUT passed the low set back in August yesterday and matched the low set in May today. The closing low on May 15th was $1096 and the intraday low was $1083. RUT's intraday low today was $1083 - precisely the same as on May 15th. Is that just a weird coincidence or is $1083 a strong support level for some reason? RUT's recent high was $1179 on September 2nd. Today's close represents an 8% drop from that high and a 10.2% drop from RUT's July 3rd high at $1208. It is safe to say that we are in correction mode; the current question is how far will it pull back? Will SPX continue to hold up relatively well?

Volatility has risen the past couple of days with the VIX hitting an intraday high today at 17.6% and closing at 16.7%. For the record, the intraday highs on VIX in the April/May and August corrections were 17.9% and 17.6%, respectively. The February correction was more severe with VIX hitting 21.5%.

Trading volume picked up a little bit today, but today's increases are off relatively large numbers from yesterday. Traders may not be flooding through the exits just yet, but the selling pressure is significant. Trading in the S&P 500 stocks came in at 2.5 billion shares (the 50 dma = 1.9B); trading on the NYSE was up 2% and trading volume rose 14% on NASDAQ.

ADP's private employment report came out with an increase of 213 thousand jobs. The ISM manufacturing survey reported 56.6 for September, down from last month, but still a good number. Construction spending dropped off by 0.8% in August, down from July's +1.2% increase.

How low can it go?