The overheated market continues to correct. Nothing in the numbers on Market Monitor show that this rally is in trouble. Even minor corrections in market look scary, but with 79/135 breakout ratio this is just a mild selling pressure.
If you read the IBD's , 'The Big Picture', it puts things in perspective:
Record oil prices and rocky earnings reports sent stocks lower Tuesday, although intense institutional selling wasn't evident.
The NYSE composite dropped 0.9%, the S&P 500 0.7% and the Dow 0.5%. The Nasdaq fell 0.6%.
Volume was narrowly lower across the board. Had trading been higher, the indexes would have logged another distribution day.A buildup of higher-volume selling in the major indexes can signal a market top.
Despite the recent selling, there are scant signs that institutional investors are dumping shares, especially leading stocks.
It has been nearly seven weeks since the follow-through that confirmed the current rally. Historically, that's premature for an uptrend to roll over.
Also, while leading stocks have given back some gains, severe sell-offs and other sell signals remain isolated among them.
This is just much needed phase in market where the 50% plus numbers had gone to extremes and now we are witnessing cooling down of momentum. Dip buyers will be active at some stage.