Yesterday's death cross in the small-cap laden Russell 2000 (RUT) cast a pall over today's market action. Midday, it appeared as if the bulls were trying to plug the hole in the dyke but the bears roared back with a late day route. VIX volatility took a jump helping to push the VIX close to the bull/bear dividing line at 15. (Over 15 is bearish and under 15 is bullish.) The major averages themselves are getting close to testing their next support levels. A fall below would be a strong indication of further downside, likely to their next levels of support.

Support Levels for the Major Averages
S&P 500 SPX: 1975, 1950, 1900
Dow Tranports DTX: 840, 820, 800
Dow Industrials (DJIA): 17000, 16500, 16000
Nasdaq: 4500, 4000
Russell 2000 RUT: 1100, 1080

Sector etf breakdowns today: Industrials XLI, Retail XRT, Insurance KIE, Aerospace & Defense PPA, Consumer Discretionary XLY, REITs (VNQ, MORT, DRN). The downward pressure in all of these etfs are indicating a high probability of further downside.

Notable Stock Weakness: Gun makers Sturm Ruger (RGR, $46.09) and Smith & Wesson (SWHC, $9.41) have been falling for months and they both recently broke major support levels to hit new yearly lows. Smith & Wesson won't face support until $8 while Sturm Ruger won't see it until $40, roughly 13-15% below today's closing prices.

Notable Stock Strength: Weight Watchers (WTW, $27) has been rallying off its mid-July low (a five year low!) and today closed the gap formed after its worse than expected earnings report in mid-February. The stock made a 7% move to the upside on over three times normal volume. The stock doesn't face major resistance until the gap at $34 which is 25% above its current price. Its past two earnings (post the bad February report) have surprised to the upside and the company could surprise again in its next announcement scheduled for October 29th.