Volume fell on the NYSE and rose on the Nasdaq.

The slower NYSE trade let three major indexes escape a distribution day. The Nasdaq added one, due largely to a surge in Cisco's (CSCO) volume.

Overall, Thursday's action wasn't particularly disturbing.

If you look at the Nasdaq's daily chart, the action is in line with the Nasdaq's staircase pattern since Sept. 1. Dips of 1% to 3% have interrupted the Nasdaq's steady advance numerous times.

The decline from Tuesday's intraday high of 2592.94 is in line with previous dips. In about half of those cases, the declines didn't involve a distribution day. The critical factor is whether the decline continues, especially if it involves additional distribution.

The market remains in an uptrend, but you'll want to keep a close watch on the indexes' price and volume action, and the behavior of top-rated stocks.

Meanwhile, Investors Intelligence's bulls vs. bears secondary indicator has yet to reach the danger zone. Markets tend to peak when the percentage of bullish advisers is at 50% to 55% and the bears under 20%, according to Investors Intelligence.

When the market peaked in April, the bulls had been over 50% for two weeks and the bears under 20% for four weeks. Now, the bulls are at 48.4% and the bears at 23.1% (see the bottom of page B2). This would suggest that the market is not yet at the frothy level associated with intermediate peaks.

But secondary indicators are secondary for a reason: They aren't as reliable as the primary indicator, which is the market's price and volume action itself.

Thursday offered no new economic data, but several items remain on the back burner. They include fears of a prolonged currency trade war. The G-20 summit, which concludes Friday, is trying to address those fears. A second item on the back burner is extending the Bush tax cuts. The White House is open to an extension but is giving conflicting signals.

1) The Nasdaq slid 2.4% for the week, the NYSE composite 2.3%, the S&P 500 2.2% and the Dow 2.2%.

Stocks careened lower Friday as the market's uptrend showed more signs of sputtering.

Even before the U.S. markets opened, inflation fears in China and a 5.2% drop in the Shanghai composite set a glum tone. The bulls never recovered.

The Nasdaq lopped off 1.5%, the NYSE composite 1.3% and the S&P 500 1.2%. The Dow held its loss to 0.8%.

Volume was up on the NYSE and down on the Nasdaq.

The action slapped a distribution day on the three NYSE-related indexes. The increasing amount of institutional selling and other red flags mean the market's uptrend is under pressure.

The Nasdaq didn't suffer distribution, thanks to lighter volume. Still, the Nasdaq, along with the Dow, added to the day's negative tone with bearish technical action.

After rising above its April closing high on Nov. 2, the Nasdaq held above that level for eight sessions. Ideally you want to see old areas of resistance turned into support for the next move up.

But that didn't happen. On Friday, the Nasdaq finished below its April 23 high.

The Dow also ended below its April close on Friday. The S&P 500 and the NYSE composite closed below their April highs on Thursday.

There's nothing to say the indexes can't turn things around. Sometimes resistance has to be broken several times to stick. But Friday's action was discouraging.

With the uptrend under pressure, investors need to take a more cautious stance. If you're in doubt about a stock in your portfolio, you might consider lightening up. Don't let a small profit spin down to a loss. As always, sell any stock that drops 7% or 8% below your purchase price.

Stocks can be bought with the market under pressure, but you want to be selective. With 10 stocks falling for every one that rose, finding buy candidates Friday would've been tough.

Avoid trying to predict the market's next move. The next step could be a correction or a resumed uptrend. The past 12 times the market outlook as "under pressure," the next move was to correction six times and to resumed uptrend six times.

Research since 2006 shows that from the day an uptrend comes under pressure, the indexes drop 5.6% on average before heading up again. But more than one-fifth of the time, the loss reaches a double-digit percentage.

2) Ireland Debt Fears, China Rate Worries Hit Global Markets

Speculation that Ireland may seek a European Union bailout and worries that China might try to hit the brakes on its economy to fight inflation roiled markets on Friday.

Renewed concern over Europe's disunity in handling a debt crisis that began with Greece and spread to other indebted countries unsettled investors amid the Group of 20 nations' failure to agree on pro-trade policies in Seoul.

Ireland denied reports that it'll request a bailout from the EU. Irish debt yields, as well as that of Portugal, Greece and Spain, have been climbing for two weeks after Germany spooked bond investors by signaling it wants them to share in the cost of bailouts and possible defaults. The euro closed up Friday after EU leaders stressed that existing investors wouldn't take a haircut. But it fell for the week.

"Haircuts to debt are off the table. But the long-run rules of the game for (eurozone) countries still need to be thrashed out," said Nomura analyst Peter Westaway.

But global asset prices — which rose for months ahead of new Federal Reserve easing — sold off on fears that China might hike rates after inflation there hit a 25-month-high 4.4%. The Shanghai composite dived 5.2%. The S&P 500 ended off its lows but still lost 1.2%. Gold, oil, metals and grains also fell hard.

'A Bad Toothache'

Europe's economic slowdown outside Germany is already testing the viability of a rescue fund hammered out this summer in the wake of Greece's debt crisis. Germany has been at odds with France, Spain and Italy on get-tough measures for countries that violate fiscal targets.

"It's like a bad toothache that's coming back again," said John Silvia, Wells Fargo's chief economist.

The big question is whether Greece, Ireland and others can expand at a sufficient rate to stave off default while taking growth-sapping austerity measures.

"The EU is trying to buy time. If there's decent income growth, (nations) may be able to keep moving along," Silvia said. "But if income shrinks, if interest rate expense is too high, what wasn't a serious debt problem could become one."

If Ireland does get an EU-IMF rescue, Barclays estimates it would be 80 billion euros to 85 billion euros (about $113 billion) over 2011-13.

While the Fed is pumping even more money into the U.S. economy, the European Central Bank says it has no such plans.

David Wyss, an economist at Standard & Poor's, says Ireland has been hard-pressed to support its banking system, which is huge relative to the size of the economy. The ECB needs to do more, he says.

"If there is a consistent policy that provides liquidity, under reasonably stringent terms, the crisis can be calmed down," Wyss said. "The problem in Ireland and Spain isn't really fiscal policy. It's the cost of bailing out the banking sys tems because of the bursting of the housing bubbles. Central banks in these countries can't add enough liquidity by themselves. That function has been handed off to Frankfurt. And, the ECB isn't acting like a normal central bank would."

Ireland's woes flared amid calls for the EU to clarify the Sovereign Debt Restructuring Mechanism. At the G-20 meeting, EU leaders released a statement that the SDRM would only apply to debt issued after mid-2013, not existing debt.

EU leaders have stumbled badly, says UniCredit Group economist Marco Annunziata.

"The eurozone's credibility deficit is getting larger by the day," he wrote in a research note. "If by 2013 countries like Greece, Ireland and Portugal are still in a shaky position, with weak fiscal accounts and weak growth, any new debt issued with SDRM clauses will carry exorbitant yields. The EU would then have to choose between a full-fledged, open-ended bailout, and reneging on the promise that existing debt would not be restructured."