Of course the market is exhausted. It had run 33.88% from its' May Low's. The sideways movement is healthy for the market. It's allowing it to work off the excess part of the run (a.k.a Shakeout the weak holders) before possibly resuming its' way up.
After experiencing the March and April drops, you'd think investors would be happy with the sideways movement, rather than a sudden drop, that disintegrates their portfolio's in a matter of days. But they complain when the market is down, they complain when the market moves sideways, and they only cheer when the market is up. All part of human nature. What these complaining investors are missing, is the opportunity to be on the lookout for new breakouts or breakdowns. As this market moves sideways, various stocks, from old to possibly new leaders, are completing their bases. Either to explode to the upside or downside.
Today's action was positive as the market marked another day of accumulation, after yesterdays distribution day. The market is set up for tomorrow's unemployment report. The three week base the NASDAQ has formed, will act as a launching pad either up or down, depending on what the unemployment report has to say. Tonight is a good night to review your portfolio for stocks that might be on the verge of breaking down, in case the report is negative. It's also a good night to look for stocks ready to breakout or breakdown. If you make this list, no matter which way the report goes tomorrow, you'll be ready to take advantage of the move.
If you have to remember anything, remember the following:
Cut you losses short. Let your winners run, not your losers.