The stock market staged a huge intra-day turn to the downside on Monday, led by the Nasdaq. At one point, the Nasdaq was up by 12.48 points at before closing lower on the day at 4,740.69, losing 40.06 points. The DJIA closed 106.31 points lower at 17,852.48, while the S&P lost 15.06 points to finish at 2,060.31. The Russell 2000 lost 1.28%, closing down 15.12 at 1,167.31. The Russell 2000 index is now back to breakeven for the 2014.
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The S&P 500 Trust Series ETF (SPY) volume traded over 108 million shares on Monday. This was roughly 20% more volume versus its year-over-year average. Once again, the increased volume was on a down market day. That has been the pattern all year long. Up days are usually on low volume and down days usually have high volume for this index.
The streak of seven consecutive up weeks for the DJIA and S&P 500 is in jeopardy; however, it is only Monday so the markets have time to stage another up week.
The technical indicators seemed to suggest Friday that the market was overbought and in need of some consolidation. The question going forward now is, is this a consolidation or the start of something more substantial to the downside? Caution is warranted.