Late day plunge
The markets were weak all day, but the selling really accelerated in the last hour of trading. Volume rose on the NYSE (not the Nazz), marking the 2nd consecutive day of distribution. This is the first time the SPX has had two consecutive declines of 1% or more since April.
Breadth was terrible, with upside volume accounting for only 10% of total volume ==> heavy selling pressure. The Hi/Lo index also fell into negative territory, with 158 new lows and only 74 new highs. And the CBOE put/call ratio finished the day at 1.0, as fear started to peak.
The culprit, at least according to the talking heads, was lingering concern that inflation is heating up, and that this will cause the Fed to slam on the brakes harder than previously thought. I'm not sure I agree with this. I think inflation is spiking currently, but that it will likely taper off as energy prices ease and demand slows a bit.
Like I said, protect your capital until this selloff runs its course. It might take a little while, but I think we will have another tradable rally sometime in the fourth quarter.