Stocks Sell Off Into The Close

Today was an interesting day in the stock market as sellers took control late in the afternoon. Above is a 3 minute chart of today’s action with the small caps on top and the S&P500 in the lower panel. What I found interesting today was that as the S&P made new highs at around 2:50pm, the small caps and the NASDAQ (not shown) did not break high. This was a classic example of non-confirmation of the indices and as a result the market subsequently sold off into the close. Keep in mind the NASDAQ and small caps have been leading the stock market higher over the past 3 months but today we saw the first signs of possibly money leaving this market. Remember, this is a just a 3 minute chart so take it for what it’s worth but it is something to keep an eye on as the market has enjoyed a nice rally and a pullback is likely.. Just to be clear, I am a buyer of dips but am scaling out of a portion of my long position here. I think long term this market is going higher but short term I feel a pullback is due.

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