Thought I would be starting a new thread with “market correction”, but despite the blood, volume was lower on all 3 exchanges, so not a distribution day. At least that is how I see the volume on the charts, but IBD says this
Trouble persisted in the stock market Wednesday, as the Nasdaq’s pullback reached 5% since its April high and a test shaped up for the S&P 500.
The Nasdaq chopped off 0.8%, while the S&P 500 and the Dow Jones industrial average each lost 0.6%. The IBD 50 fell 0.6% as well. Volume fell on the NYSE but rose on the Nasdaq. That gave the Nasdaq a ninth distribution day in the past few weeks — a worrisome number.
Here is what it looks like
http://stockcharts.com/h-sc/ui?s=%24COMPQ
Odd.
and this
The Nasdaq remains stuck under its 200-day and 50-day moving averages. That battle to hold above those levels appears lost for now, but the individual investor should watch to see if the Nasdaq can retake the lines.
In a more immediate sense, the S&P 500 is the index to watch. The S&P 500 is testing its 10-week line now and is coming close to the 50-day line. If the S&P 500 can bounce off those lines, then there’s a chance the rest of the market will follow. If support collapses, things could get ugly.
Another item to keep an eye on is the put-call volume ratio. On Wednesday, the put-call ratio closed at 1.11, the highest since March 8’s 1.21 reading. The put-call is a fear gauge with a contrarian bent. A high reading is considered bullish. After hitting 1.21 in March, the indexes rose about 7%.
I have good cash now and don’t mind getting back in “late” after we get a follow thru day, but that seems a ways off. Sell in May?