It is too early to call today’s weakness “the top of the move”, but the selling should be enough to get the attention of the most ardent bulls.    So far, this is just one day of selling in what has been a terrific bull run over the last 2 months.  Yesterday I said that the overnight action in the futures on Tuesday night was a “shot across the bow” and today the market fired a new warning.  This time the message should be viewed very strongly, it is time to give the always present risks more respect than they have received over the last several weeks. The highly speculative action in small stocks has been fun and profitable, but now it is time to adopt a much more defensive stance.

The trendline from the bottom has been breached in the Qs but thre is another trendline drawn in which hits on enough points to be considered relevenat, the market is on that level right now.  In the IWM, the uptrend line is still intact and the important level of support remains near 48.00

The SPY and XLF still comfortably above the relevant trendlines and prior levels of important resistance, which should act as support on a pullback, unless this turns out to be a major reversal and it is too early to call that.  Large short positions are not warranted yet, but longs should be pared considerably.