There Is Red Everywhere
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 this afternoon to 12,750.29. The last time the DJIA closed down more than 100.0 points you have to go back to December 2011. Today'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 today the tech heavy index is trading lower by 1.44 percent.
As you may know, the trading volume has been extremely light over the past three months. Today, the trading volume is slightly heavier than normal. The highly popular SPDR S&P 500 Trust (NYSEARCA:SPY) is 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. This afternoon, the QQQ is 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 are coming under selling pressure this afternoon include China Life Insurance (NYSE:LFC), WPP plc (NASDAQ:WPPGY), 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. As of this time, the market sell off could simply be profit taking.