Markets finished the week Friday with one they would probably rather forget. The Nasdaq took the brunt of the selling losing 4.5% on the week in the 3rd largest weekly volume of the year. Perhaps the bulls can lay their hat on the fact that the indexes softness came to rest right near its 200 day SMA, as did the S&P 500. That line has proved very comforting for both of those benchmarks since the beginning of 2013 and it will be very interesting next week to see how they hold up. The S&P 500 fell 3.1% for the week, and now is AHEAD of the Nasdaq on a YTD basis up 3.1% and the Nasdaq higher in 2014 by 2.4%. Weekly volume on the S&P 500 was the largest since the week ending 5/18/12 when it fell 4.3%. The Nasdaq was hit primarily due to the frailty in the semiconductor group. The selling in the sector began as MCHP spoke very negatively of both the present and more importantly the future. The SMH plunged 9% in gigantic trade, the most since the week ending 11/18/11. We spoke of the transports importance earlier in the week, and they have vanished from the top perch of the leading groups. Rotation is a good thing, but when you are replaced by such defensive groups as food and beverages, and hospitals and consumer staples it makes you wonder. The major indexes are now approaching correction mode, with the Nasdaq off 7.3% and the S&P 500 by 5.6%. Volume can often provide some clues and the amount of it we saw this week will most likely provide some tradable bounces. Buckle your seat belts, do not try and be a hero and stay small and have your Game Plan ready.

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