Yesterday was an ugly day, driven by lots of ugly news. With the Dow down over 110 points already, today's not shaping up to be anything fantastic either. Ironically, though, the selling on Wall Street has now grown so intense that it could trigger a dramatic snapback any day now.
I'm certainly not making light of the factors that contributed to yesterday's 358-point Dow debacle. A $5 jump in the price of oil, for example, is nothing to laugh off -- not when it lifts us to a mind-blowing $139.64 a barrel (another new record, of course).

However, it seems we've arrived at the "pile on" stage in oil. What triggered today's spike was a statement by OPEC's president, Chakib Khelil, that crude could soar to between $150 and $170 this summer. Libya threw a log on the fire by adding that it might cut oil production.
In other words, people with a vested interest in higher prices are apparently trying to create a self-fulfilling prophecy by stampeding an already jittery market.

Oh sure, all we know about the "Wall of China" that supposedly separates the research and trading functions of the big Wall Street firms. But these guys and gals meet -- and talk -- in many informal contexts, over an after-work drink at McSorley's Old Ale House or over the backyard fence in the Hamptons. Word gets around.

Even if these actors are totally aboveboard in their motives, the fact that so many of them are piling on a trend that has already gone to such an extreme suggests that a reversal is imminent. Technically, stocks are now severely oversold from an intermediate-term (one to three months) point of view. Within weeks, perhaps days, we should start to see a bounce.