Monday was all about the news and the blues. The news was that the Dow hit 16,000 and the S&P hit 1,800. The blues was that the market sold off in the afternoon. The market opened higher this morning, and then it went sideways, coiling on the 5 min timeframe. At about 2:30 p.m, the 3 major indices sold off steeply.

Key reversal bars formed on the Nasdaq and S&P, although volume was lighter than Friday's volume. Increased volume would have been a more ominous sign. At the end of the day, the Nasdaq slipped -36 points (-0.93%), the S&P 500 fell -6 points (-0.37%), and the Dow gained +14 points (+0.09%).

After 6 consecutive up weeks (S&P), its not surprise the market dropped today on profit taking, and this could be a down week. Unless heavier down volume comes into play, it is not time to get bearish. Market direction is still bullish. At the same time, the risk of correction is still rated as high, so caution is the best approach to this market. 

There are a couple of other concerns to mention. NYSE TICKs are lagging price, creating divergence on the daily chart. Also, market breadth is weak relative to price. If these market gauges show further weakness, we could see the market slip into another correction.