The market sold off on higher volume today creating a distribution day on all major indices.
The NASDAQ and S&P distribution count is now 3. Tomorrow the distribution day seen on 8/21/12 falls out of the 25-day lookback window dropping that day from the count so effectively the distribution count is still 2.

By a very slim margin 9/21/2012 missed being labled a stall day, it showed most of the characteristics of a stall day and a different person might call it that. Worse today was that the NASDAQ closed below the 21-day ema giving us an S5 sell signal. AAPL also closed below the 21-day, a line held since June. The exposure is still fully invested with an exposure count of +6.

Early this morning before the housing report I sold NSM at a routine +25% gain target. I sell most positions at 20-25% gain unless they are identified for a longer term hold. It is important to take profits along the way, however if a stock goes up 20% in less than three weeks it will be held for a minimum of 8 weeks and then reevaluated at that point.

I held KORS today even though it showed a possible sell signal (highest down volume since the beginning of the advance). Masking this volume is the 20 million shares coming into the market in a secondary offering. I give the market some time to absorb events like this. Today's KORS volume was more than the 20-million secondary issues plus 50-day average volume so additional sell offs could be telling.

I normally don't become concerned about a topping market until the distribution count gets higher. I do take note that on March 9, 2000 the distribution count was 1. The very next day the NASDAQ made an all-time high of 5132.52 on a day seen as a reversal and a stall day. It has been down hill from there. So distribution is not always obvious on the way to the top. It was the action of leading stocks that told the real story in 2000.

Leading stocks MLNX and UA closed below the 50-day today and FWRD was clearly being sold with institutional volume. Netsuite (N) had a higher volume reversal today. I remain in LNKD, ELLI, KORS, EQM, N, FLT and PII.