Despite the late day rally, the markets are still in poor technical shape. The IWMs, SPYs and DIAs are in downward sloping channels. Although prices rallied yesterday, they must move through the descending EMAs in order to show real strength. Also note all the EMAs are moving lower and are above all the prices. In short, prices are literally hanging on by their fingernails.
In contrast, the treasury market is still rallying. All the EMAs are moving higher, and prices are in a clear uptrend. This market is the obvious beneficiary of unrest in equities.
When viewed in conjunction with one another, we see a clear pattern emerge: equities are selling off and bonds are rallying as a result. Also note the equities are waiting for Friday's employment report. It that report is bad, we'll probably have a big and nasty sell-off.
