China's decision to devalue the yuan by 1.86% overnight (the largest on record and the biggest drop in 20 years) created a major ripple in the markets with a major effect on the emerging markets (EEM).
Apple was also hard hit based on news of Chinese firm that's sucking the oxygen out of Apple's Chinese market. This isn't new news it's just being pumped with a huge negative impact on Apple.
The markets basically gave back Monday's gains and more in some sectors. The updated Ponzo chart below reflects Randy Frederick's comments this weekend that high volatility should be expected over the next 6 weeks...September tends to be the worse performing month of the year...so caution is key at this point. We now have an almost equally balanced long/short risk forecast on the SPY.