The market has piled another day of distribution. Precious metals, oil, and the dollar mixed it up causing the market to come under selling pressure. Crude Oil slid further as the dollar rose sending oil services and drillers to the downside. More concerning is the action out of the biggest financials. The NASDAQ and S&P 500 stand with 5 distribution days on the brink of sending this market into another correction.
Stocks were sold out of the gate gapping lower. It wasn’t before long before buyers began to step up and push stocks higher. President Obama’s speech on job creation and a positive 3 year treasury auction failed to lift stocks. Buyers were simply not found as volume held its pace from the morning.
Recent action has suggested that profits should be taken quicker and losses kept very small. Today is another example of the pressure this market has undergone. Last month the market was on the verge of collapse with volume running much higher. We are experiencing similar action, but this time we are experiencing back to back distribution. Calling a “top” here is a bit premature as tops can only be viewed after the fact. However, price/volume action as well as narrowing leadership should have you in cautious mode.
It will take a surge of buying volume to overcome the selling we have experienced. Stay nimble and disciplined.
