In the early minutes of the day the S&P 500 has slightly undercut the key 1294 level but I would not say it is a sure thing there is a big selloff today. Indeed, I would not be surprised to see a bounce here as quite a few secondary technical indicators are showing oversold readings or close to it. I've put a few on the chart below, but there are certainly others. We can see quite a few at the same level as during the November 2010 selloff.
With bears constantly beaten over the head with the Monday morning premarket surge, the action later in the day will be interesting. We've seen a lot of changes in character of late - another one would be bears not entering the weekend on the run. I am not counting on that one...this weekend at least.
Gun to head I say we rally today to work off some of the oversold condition and long side traders can make a short term bet with this morning's lows (S&P 1292ish) as a stop out level. I'd be selling off any short side protection this morning and only putting new bearish positions on if we broke to new lows for the day - say sub S&P 1290. Unless the action dictates it's better to be a bear, I'm more of a bull today. ;)
Best scenario for bears, is after a cursory bounce the market breaks to new lows of the days - then the 'buy the dip' crowd should run for the hills, and some real worry will creep in. Let's see how it goes.