A solid down day supported by volume and breadth. So far, the decline in stocks from the April high has traced out a zigzag, as well as a budding five up from today's low. No confirmation on either direction yet going into the close, as the market is known to do.
If the futures can deliver the final 5th of a 5-up (i.e. making a higher high before breaking 1299 in ES, odds would favor a low being in place.
The surge in the USD index is understandable from an EWP perspective. Fundamentally, it is likely driven by the expected improvement in interest rate differential as the result of the SP downgrade on US outlook (and for today, the initial spike down in stocks). The question is whether these fundamental expectations are sustainable.
[11 am] Please see Stocks, VIX, DX (4/15/11) for context and discussions.