Heavy volume selling struck the market down marking a day of distribution. One day of a heavy volume selling does not break an uptrend, but this one grabbed our attention. The day started off well with the market pushing to the highs of the session prior to noon time. Just as it appeared we were ready to take off to new highs sellers jumped on the opportunity to push stocks lower. Just as the sellers got going riots broke out in Spain over their economic issues. Fear continued to grow and sellers continued their operations right until the close. Volume ended the day nearly 20% higher than Monday's level and with the price declines notched a day of distribution. Our uptrend is under pressure, but one day doesn't change a trend.
Since the announcement of QE infinity or QEn the market has been consolidating the gains. The consolidation was going very well up until today's action. A day of distribution here or there is okay, but when it comes with this type of price decline we must be on alert. Even a quick 5% correction can see leading stocks getting blown out of the water. It is important we take our signals and when sells are triggered we execute. Hanging on to hope is no way to be in the market. Yes, we have QE, but will it overcome the economic troubles? Can this market continue to push higher? The $64,000 question only price will answer.
One day does not make a trend, but a collection of distribution days will not be a good signal for the market. Leading stocks have already begun to move lower and today was no exceptions. Stocks setting up in bases like GNC have suffered some nasty selling. The market will need to stabilize and move higher otherwise we can expect this market to correct deeper than 3-5%. It is anyone's guess if today was a fluke or not, but this uptrend is under a bit of pressure. Stick to your signals and always cut your losses short.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.