A mild selling pressure is hitting the market so far.
In lst 14 trading sessions there have been 8 negative breadth days. but none really big 300 plus on 4% . which indicates mild selling pressure. A series of 300 plus days on number of stocks up $4 plus can accelerate selling . Absent that this looks like buyers strike. Not many buyers willing to chase at this level.
A mild selling like this can possible indicate a mild pullback. As we have seen since beginning of QE3 , there are not major corrections in the market. Most pullbacks have been less than 5% and lasting less than a month.
On a practical swing trading level, the last ten to fifteen days have had very selective rallies in handful of stocks. But at the same time number of breakouts have failed. Few shorts are working .
As the market has shown tendency o bounce back from minor correction traders have been conditioned to dismiss any breadth divergence or pullbacks. Which creates condition for some of the traders getting caught on wrong side at some stage. Personally I still like to be cautious at some juncture still things are clear. My objective always remain to make money but not lose money and especially not lose money due to returns so far. Low drawdowns is my primary concern.
What happens next will depend on breadth trends. If breadth keeps deteriorating then it will indicate further weakness.