Change in character

In last few months there has been a constant buying pressure on any weakness. The buying has not been strong enough to get big move going . The small caps have struggled for a month or so.

The big selling on Monday was followed by  another round of aggressive dip buying on Tuesday. Today however the dip buyer could not muster much of a rally.

Individual stocks continue to breakdown. Breakdown in sector has been happening for weeks, however money kept rotating in smaller and smaller number of stocks. Now the last 3 days of action has resulted in more breakdowns.

Every time the market has been down in last few years the Fed has aggressively responded by changing the policy. Expect same thing this time. That puts the floor on depth of correction. Good corrections are good for the health of the market as they create new leadership and create constructive buy points. However constant Fed action has changed the character of the market.