This morning opened on a sour note and the selling has now gotten heavier, with the Dow industrials dropping 1,000 points (3.6%) and the NASDAQ once again leading the way down with a 5% slide. All of the biggest stocks are in negative territory, with even defensive names like Johnson & Johnson (JNJ) and Visa (V) retreating about 1%. Tesla (TSLA), Amazon (AMZN) and NVIDIA (NVDA), meanwhile, are down 6-7%.

While this started with an earnings miss from Target (TGT) confessing that freight costs were choking their operating margins, the breadth of the selling (96% of the S&P 500 is down) seems exaggerated if the retail sector is really the culprit here. Instead, I suspect that we’re watching a technical situation play out here. The S&P 500 got a nice bounce from oversold conditions yesterday but failed to break resistance this morning, leaving the bears in control of the chart as long as traders are more worried about a recession and higher interest rates ahead than a bright future beyond.

I’ve actually been telling people that what the market needs right now is a big down day to wash out the weak hands and let the rest of us get back to work. With the VIX catapulting back beyond 30, this may be the capitulation we needed. However, this might not be the bottom. We could easily test last week’s lows. But for now, with interest rates well off their highs, the market might be ready to shift into a channel until next earnings season provides an opportunity to flip the narrative.

Either way, I’m watching . . . and just wanted to reach out with my thoughts. We’ve been through much worse together. We’ll get through this as well.