Market Monitor

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.