The Standard and Poors 500 index (SPX) closed today at 4224, down 54 points or 1.3%. SPX opened the week at 4342, setting up a weekly loss of 2.7%. Today’s loss solidly broke down through the 200-day moving average (dma). Trading volume increased steadily all week, peaking today at 2.7 billion shares, well above the 50 dma at 2.2 billion shares. That increase in trading volume was an endorsement of the downtrend.

VIX, the volatility index for the S&P 500 options, closed today at 21.7%. VIX opened at 19.1% on Monday and declined to 17.2% at the close on Monday, but steadily rose all week.

I track the Russell 2000 index with the IWM ETF, which closed today at 166.4, down 2.2 points or 1.3%. IWM opened the week at 171.7, setting up a 3.1% weekly loss. On Monday, IWM’s 50 dma crossed down through the 200 dma.

The NASDAQ Composite index closed today at 12,984, down 202 points or 
1.5%. NASDAQ opened the week at 13,454 for a weekly loss of 3.5%. NASDAQ broke its 50 dma last Friday and is now approaching its 200 dma at 12,730. Trading volume was below average all week, with the exception of yesterday.

The weak state of this market may be summarized by noting that the S&P 500 and the Russell 2000 have now broken both of their 50 and 200 day moving averages. NASDAQ has broken its 50 dma but remains above its 200 dma.

Last week, I was skeptical of IBD’s move to Uptrend Under Pressure, because the market looked weaker to me. Monday and Tuesday’s relative strength fooled me. I should have started moving to cash. The marked decline of the Russell 2000 last week was the warning shot.

 I entered several new trades cautiously last week and remained in them this week. That was a mistake. Many of those trades could have been closed for gains on Monday and Tuesday. Mea culpa.