good news, bad news

Good news: the recent selling in the indexes have been with very low volume, which supports the thesis that the selling was driven by futures selling. The indexes also have fallen below 2 standard deviations of price, which generally indicates a near-term bottom (see: James Altucher's How to Trade Like a Hedge Fund.) Additionally, a December-early January washout could setup a rally.

Bad News: Breaks below November-December lows.

Bullish outcome: Recent decline is an island reversal and market reverses.
Bearish outcome: Q4 2005 rally is over, potential test of prior lows.

Short 2005's winners on strength, ie NTRI short @ 37, HANS @ 82.