Looking at a weekly chart of the S&P 500, we can see clearly that the market is under distribution- professionals selling into strength.

The white arrows show good volume on the breakout that gave traders confidence to keep trying the long side with nice, tight setups even though breakouts weren’t leading to sustained momentum most of the 1st quarter.

However, now the change in character of the indexes is confirming the poor action and lack of follow through on breakout setups. The first red arrow on the price candle shows the first distribution day after the rally from $3,500 on the SPX. All the red arrows on the volume graph show increasing volume on down days. This is a tell tale sign of professional selling on the way up.

The market is leaving speculators clues as to the future direction. Selling with the pros is what disciplined speculators should be doing until the price and volume say otherwise.