The exhaustion of selling, which could lead to a sustainable advance, doesn't seem to be near at hand. Chances are good that this will turn out to be a bottoming phase presenting attractive portfolio upgrading opportunities.
Investors are on the sidelines, as suggested by the light trading volume.
They are awaiting clarification of the implications of the break in the market's upward momentum and of the monetary tightening. The Federal Reserve's goal, an economic soft landing, or the heading off of inflation without forcing GDP to contract, is by no means easy to achieve. One reason is that increased yields of fixed-income investments draw money away from stocks. Another is that higher rates, because they tend to slow demand for products and services and increase corporate borrowing costs, presage more moderate growth of earnings. But while uncertainty over valuations will probably keep stocks on the defensive, much of the adjustment may have already taken place.