Tuesday's Market Moves

Yesterday, volume unexpectably rose on all three major exchange indexes and stocks continued to sell off with more conviction than Monday. The Dow ended down (-185) -1.96%, S&P (-22.58) -2.2%, and the Nasdaq (-40.17) -2% . Decliners trounced advancers by 4-to-1 on the NYSE and more than 3-to-1 on the Nasdaq.

The market has been heavily anticipating a correction and pull back from an incredible run off the March lows. Volume is settling out but is surprising considering the holiday week. Big money traders may be securing their profits ahead of labor day. All eyes will be on the Unemployment economic data expected on Friday.

The usual pattern of buy on the dip into the last hour was noticeably absent. If in fact this is the beginning of a correction it will probably take a few days to draw in some late buyers and usually a faltering or stalling rally can be expected. Increased volatility should be expected into next week as the holiday week ends and Wall Street further assesses if this rally is ahead of itself.

Based on the action yesterday, further downside in prices is likely. There is a large amount of technical support at 950 in the S&P 500 which is 5%below the current level.