After thinking the bottom was in after Thursday's washout and reversal, this bi-polar market is trying to roll back over and die. I have a nice picture of what I'm talking about but I can't get it to paste.

This action isn't healthy. I can only think of one reason a market like this can't rally and stay off the lows after a 45% decline....it's not finished going down. It appears there are no real buyers in this market, only renters.

Is this what liquidation looks like? You not only have forced sellers, but also no buyers? It makes sense when you think about it. The so called "smart money" has been burned in this decline. They usually would be buyers here. They apparently either don't have the cash or don't have the nerve to step up. I bet it's the cash.

Whatever the reason, this market's on the verge of a nervous breakdown. The important levels on the S&P that have to hold are 840, 820, 788 and lastly about 760. All of those numbers are in play and perhaps one bad day away.  

If the bulls are going to make a stand, it has to be now. It's not impossible, but it's looking more unlikely by the hour. Lets see if it can fool us again.