Futures are down again this morning as the fallout from the banking issues continue to be felt. Regional banks are feeling stress today as stocks like First Republic are down severely. Stocks are in a downtrend now, the Dow Industrials below the December low, and if the SPX and Russell 2K follow that path there is quite a bit more down left.

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The 3800 level on the SPX 500 held firm the other day, that Tuesday rally put some distance between current levels and that spot. However, volatility is still rising and stocks continue to be under pressure. For the Dow Industrials, 30,200 should be watched, while

Stocks around the world were rocked early Wednesday morning on news from troubled bank Credit Suisse (CS). The bank may have significant losses and is trying to sell stock, but the market is not having it. The banking issue in the US still has not been settled, market volatility shows there is plenty of uncertainty.

Strong earnings and moderately solid guidance from cloud/software name Adobe (ADBE), while Five Below (FIVE) beat but is going to be under pressure today.

PPI was a bit softer than expected, but retail sales were down but was mostly in line with expectations.

Breadth was atrocious yesterday, this indicator is back on a sell signal. 23-6 negative is not inspiring the bulls, and staying below 3900 is says the trend is down.

Heavy volume today at the outset as buyers were in no mood to add stocks – initially. A modest rally ensued late in the day as bargain hunters and short covering did the trick. Still, strong volume to the downside means another day of distribution.

Tuesday’s rally is just about a memory now. The SPX 500 is modestly higher on a week of extreme volatility. Traders tried to push the VIX up towards 30 again and were successful, but these there was plenty of demand for put protection, the VIX still up about 10% on the day.

The Internals

What’s it mean?

Just an ugly day all around, and it started from the overnight session. Notice the consistent move down in the VOLD, the adspd on a trend down day. The TICKS were concentrated in red all day long, while put/call remains elevated. There is fear in these markets.

The Dynamite

Economic Data:

• Thursday: jobless claims, philly fed index, housing starts/permits
• Friday: IP/cap utilization,, LEI, sentiment, Eurozone CPI, labor cost index

Earnings this week:

• Thursday:DG SIG FDX GME GRPN DBI WSM
• Friday:BLDP

Fed Watch: No Fed speakers this week as the committee is in the blackout period before their next meeting. However, the data is going to skew the fed funds futures, so we’ll be watching the movements this week.

Stocks/Issues to Watch

Name – Bank ETF, which is falling sharply with all the bank issues.

Name – Rates, which fell sharply on Monday.

Name – VIX, continues to move upward.

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