996 stocks down 50 cents plus

And then the dam opened....

For last few days there was slow distribution build up and then we saw the real selling. It was broad based sell off.

It was second highest sell pressure day this year based on Market Monitor data. 628 was the highest sell day on February 22, 2011. Yesterday was 620 day to the downside.

One of the ways I look for sell pressure or buy pressure is to look at stocks down 50 cents from open or stocks up 50 cents from open (only on stock with last 3 days volume of 100K plus). Yesterday we had 996 stocks down 50 cents plus from their open price. That is approximately 46% of the stocks that have 100k plus 3 day volume. All in all a broad based sell off.

The key is to see if we get follow through. 

This market has been in range since February and that range has been tough to break out of.

From the 2009 bottom we had 2 big up moves. So a period of sideways churn is not something unusual. 

The last long duration swing in this market was from December 2010 to February 2011. If market has those kind of long duration swings then swing trading methods that rely on finding intermediate terms swing work. In chop fest you need to be extremely nimble or trade extremely small time frame. Or be very selective in trade selection. But overall preserving capital is key.

Swings on bullish side in this market this year have had 12 day maximum length. Sharp rallies that petered out is the story so far this year. 

But if you zoom back and look at the market on a quarterly time frame you will see market near high.

At this stage it is still a range bound market.......