I jumped the gun a little this morning in looking for the selling to pick up. The dip buyers jumped in and nearly had the market back in the green. Breadth is still running negative overall but it is positive on the Nasdaq.
The most worrisome thing about the action is that the momentum names are under pressure. For example, only 13 of the 50 stocks on the Investor's Business Daily list are positive, and my other lists of "hot stocks" are seeing nearly 2 to 1 negative breadth. A bounce in Apple (AAPL) is helping the indices but there is fair amount of weakness, which is a slight change in character.
I'm trying to put some money to work, but it sure isn't easy. One setup I like quite a bit is Argentinian oil and gas company YPF SA (YPF). It is expected to grow earnings 17% in 2013 to $3.44 and trades with a trailing price-to-earnings ratio of just 7. Technically, it has been basing around the $14.50 to $15.50 level for six weeks after a big move and it looks in good shape to move higher, especially if volume picks up.
I'm a little nervous about this market and wouldn't be surprised to see a weak close today. There is still underlying support, but it is weaker than it has been and a poor close would cause some people to rethink a few things.