The action so far Thursday is confirming a change in the character of the market. I've been writing for a while now that we need to let the price action be our guide. After the weakness Wednesday and the follow-through today, it is clear that the recent uptrend has sputtered out and that the market is in danger of rolling over.
I don't want to be too negative here, as this is the first bout of real selling we have seen so far this year. But it is very important to take some defensive action, just in case this isn't just some healthy consolidation. So far the action today constitutes confirmation that the bears are gaining control. We have seen a few minor bounce attempts, which were turned back, and the market hit a new intraday low around midday. That is an indication that there are "stuckholders" who are looking for exits into strength.
Breadth is running better than 2-to-1 negative again, and what's particularly notable is that the number of stocks at new highs is down to about 73 on the NYSE, while new lows are up to about 66. It has been a while since new lows have numbered anywhere close to the amount of new highs.
I've taken some stops and raised cash. I'm just going to stand aside for now and wait to see if the market finds some support. A weak finish again Thursday will cement the idea of a change in market character, and it will likely trigger some real fear among market players. It is extremely important to not let losses grow too large at this point.