The market is correcting?

The market fell yesterday for the third consecutive day. The DJ-30 declined 0.60%, the SP-500 had retreated 0.72% and the Nasdaq Comp. it did in 0.39%. As we said in our post of the Wednesday, the DJ-30 violated the support level  SMA 18 days. It is noteworthy that there was no response reaction and now looks set to challenge the support of the SMA 50 days.

Among major indexes, the DJ-30 and Russell-2000 are those who have led this fall. Yesterday, 22 of the 30 components of the DJ-30 lost ground, which accounts for 73%.In the case of Russell-2000, 1.436 stocks (out of 1,906) fell in price, representing 75%.In contrast, the Nasdaq Comp. fell only 57 of the 100 components.

While it is not possible to talk for now of greater correction in the market, if we can point out that this is a deterioration in technical terms. On the one hand, the indices have begun to violate certain levels of support.

Moreover, most of the indicators oscillators (such as stochastic) show that the market isoverbought and has begun to reverse the situation. Also, one of my favorite indicators, MACD has moved into negative territory in the case of DJ-30. Similarly, the RSI also shows a decline in relation to this index.

If the behavior of the DJ "catch" the SP-500 and the Nasdaq, we could be facing aslightly larger correction. For this key will be what happens in the next three to five days.