Stock market fails to get an oversold bounce

Traders have been looking for a bounce in two critical sectors...small caps and energy.

We did get a nice lift in the small-cap Russell 2000 (IWM) early morning, and it's about time: it has been a terrible underperformer for months, particularly in the last 30 days or so, when the Russell 2000 has been down roughly 10 percent versus the roughly 5 percent decline in the S&P 500.

Russell had been positive all day even as the S&P has drifted into negative territory, but now it too has drifted into negative territory.

No bounce at all in one dramatically oversold sector, energy. The main ETF for exploration and production stocks (XOP) is down 23% in the past month.

Crude oil (West Texas Intermediate) briefly went positive today, but the XOP has been drifting lower all day.

What's the catalyst to get something going on the upside to change the narrative? It has to be earnings. Earnings can't be any worse than the macro news.

At this point, traders have extrapolated so many negatives in the guidance that we might surprise on the upside.

The real wildcard is not European or China weakness, it's Ebola. It is impossible to model this and the potential impact on the global economy and stocks. The Center for Disease Control said it is concerned there could be other infections in the coming days, especially following the infection of a healthcare worker who treated the man who died from Ebola in Dallas.

Even though there are only two diagnosed cases in the U.S., there is a very high sensitivity to it.

Airline stocks down again today, as are cruise ships.

Overall trading volume has been heavy. On Friday we did 4.5 billion shares in NYSE listed stocks, the fifth heaviest volume day of the year.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street