A Change In Market Dynamics -- Or Just Another Chance To Buy The Dip?

The recent drop in the market, and in the share prices of high flyers from Apple to Google, has many investors wondering if "this is it" for the indexes.

We’ll take a look at the technical picture in a moment, but let’s first list some of the issues working now in the averages:

• At the beginning of earnings season, some professionals were questioning if the estimates might be too high.
• Many large tech stocks have broken down or may not recover to old highs.
• China's economic numbers have been showing a marked slowdown.
• Fed tapering is easing off, leading many to believe the party may be over.
• And some institutions selling by virtue of higher volume on down days.
• The general market psychology, meanwhile, is shifting to a more defensive mode -- as evidenced by the rotation into capital goods type stocks such as ADM. Any or all of the above issues could move the averages lower than anyone expects.
• On the bright side, the economy and jobs are slowly recovering -- giving the Fed reason to ease back on the  bond buying.

Related: Sector Rotation Points To A More Defensive Stance

Now to our technical look.

elow is a chart of the Dow Industrials. On the positive side the index is still in its channel range, even as it heads to the lower end.