Nasty Action

Today's action was nasty. No other way to put it. The markets opened strong and rallied for a few hours. But then they began to rollover, and by the end of the day, all of the major indexes finished in the red. I think oil hitting $65 could have been a big factor, as that is an eye-popping number. But remember, I also said yesterday that I thought the market was still vulnerable.

Volume levels rose for the day, making it a distribution day. For the S&P, I call this a high-volume downside reversal, which is pretty bearish. On the Nazz, we got a high-volume LROD (large-range outside day), which is more bearish. This occurs when the index rises above the previous day's high but closes below the previous day's low. Thus, on the chart, the top and bottom of today's line fall outside of the top and bottom of yesterday's line. (click on chart)

So what does it all mean? At this point, not too much. Just that the correction has more to go. Patient investors will monitor the day-to-day action, but not make any big bets until a better set-up presents itself.