For the first time in weeks, there is some sustained selling pressure in the early going. The gap-down open did not produce the typical reflexive buying and now there is a lower low as Wednesday's gap is filled.
The S&P 500 has only given back a single day of gains so far but since the action has been so strong for so long it feels much worse.
Breadth is running around 2,700 gainers to 4,400 decliners, which is poor but is not reflective of any real panic. If there is not some stabilization or bounce fairly fast it is likely to trigger another round of selling, although I suspect the dip buyers are still quite eager to do their thing.
What I find most interesting about this action is that many market participants are very quick to assume that a pullback of this sort is an indication that a major top is now forming. The idea that it is just some routine corrective action in an extended market is dismissed. In the bigger scheme of things, bouts of selling are often quite healthy as they help to eliminate certain excesses, produce better chart setups, and eliminate some of the euphoric sentiment.
It is possible that this selling develops into a major collapse but the greater likelihood is that it is just some healthy corrective action within an uptrend. That doesn't mean that you don't tighten up and play strong defense, but I'm already thinking about what stocks I want to buy on weakness rather than the necessity to cut some of my favorites.
We'll see how this shapes up as the day progresses but a few days of selling may favor the bulls more than the bears.