Market is never in a straight line.
I think the up and down movement here is probably typical action. Fast action down... and now a counter-trend rally that will soon have the indexes backtesting the MAs where you'll discover if there's real support.
Since volume is light, new lows dwarf new highs by almost 10 to 1 and the A/D line is showing bad breadth (ha ha), I'm going to err on the side of caution.
But I would almost expect to see another fierce bull run (courtesy of short-covering) to work off the leveraged shorts who think you can just short a mortgage co. and expect it to drop 90% tomorrow.
The short side just got a little too crowded... briefly.
Look: I'm confused. I think everyone is confused. So when it doubt -- you sell out easily, you cover on the sudden volume surge. The technical signals fall apart after major supports are broken. Everyone's looking for clear signals and you don't get them when a bull market is turning into a bear.
In uncertain times, I would guess a lot of frustration will lead people to cash out. Low volume supports this idea. But low volume allows large traders to move markets, resulting in bigger volatility. We see that.
For full-time traders, the trick is learning when to sit on your hands.
Can you dig it?