There Is Red Everywhere
Nicholas Santiago | Mar 07, 2012 02:53AM ET
The major stock indexes are experiencing the first severe stock decline of 2012.The Dow Jones Industrial Average (DJIA) is trading lower by more than 200.0 points to 12,759 territory. The last time the DJIA closed down more than 100.0 points you have to go back to December 2011.Yesterday's decline is broad based as almost every leading stock sector is trading sharply lower.The NASDAQ Composite has been leading the markets higher and yesterday the tech heavy index was trading lower by 1.44 percent.
As you may know, the trading volume has been extremely light over the past three months. Yesterday, the trading volume is slightly heavier than normal.The highly popular SPDR S&P 500 Trust (NYSEARCA:SPY) was trading around 150 million shares as of 3:29 pm EST.The three month average volume on the SPY is around the 154 million share level.
The Powershares QQQ Trust (NASDAQ:QQQ) has staged an amazing move since December 19, 2011 when it traded as low as $54.17 a share. Yesterday afternoon, the QQQ was finally tagging the important 20 moving average on the daily chart. It is important to note that the last time the 20 moving average was tested was on December 30, 2011.This tells you that this market is long overdue for some type of pullback.
Some leading stocks that came under selling pressure yesterday afternoon included China Life Insurance (NYSE:LFC), WPP plc (NASDAQ:WPPGY.PK), Lululemon Athletica Inc (NASDAQ:LULU), and Steven Madden Ltd (NASDAQ:SHOO). When the market leaders start to decline it is always a little bit of a warning signal. Of course, at the moment, the market sell off could simply be profit taking.
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