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If there is one thing recent volatility is offering people is a fantastic opportunity to increase their pension contributions, or start a pension if they haven't already. Nobody knows what will come next, but what we do know is markets are offering a steep discount and therefore an opportunity for us benefit. Pension contributions come with tax breaks, which anyone can take advantage of, and the dollar-cost-average approach works best in this situation.

If we want to consider a deep swing low, when the S&P gets 30% below its 200-day MA we have a major low, which based on the current 200-day MA, is around 4,029. A more positive spin on recent volatility is to look for a rally to the swing low 5,500, before a retest of the current low at 4,835 (or lower if we break it tomorrow).

The Russell 2000 ($IWM), like the S&P, retraced most of yesterday's trading action, although trading volume was well down on the last couple of days. Crash action did kick in on an oversold momentum state, so on the next rally (out of an oversold state), we need to be careful the next move to an oversold momentum state doesn't trigger another deep wave of selling, similar to what we saw in 2009.

The Nasdaq is outperforming relative to its peers, and should have the *best* opportunity to lead out if buyers return tormorrow. If looking for a swing trade, then a rally to 17,000 looks like a good play if you can get a fill near 15,000 with a stop below Monday's low.

The main concern with today's action were the broad red candlesticks that look destined to deliver another set of similar candlesticks tomorrow, and therefore new lows.

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