Bulls Won't Back Down

 | Jan 29, 2013 | 10:45 AM EST
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The bears are working hard to crack this market but without success. It bounced back very quickly from a weak open and immediately shook off a poor consumer sentiment report. There is still good dip-buying support. The bears' growing confidence that this market has to fall apart soon is also giving it a little short squeeze.

Trading in individual stocks is sloppy and pockets of momentum have shrunk, but the bulls aren't ready to back off. Breadth is negative with about 2400 gainers to 2500 decliners and there is more weakness in the high-momentum names, but there isn't any big rush for the exits.

Strong markets have a tendency to stay sticky to the upside as there are plenty of folks who want to buy dips. That is one reason tops are processes that have to play themselves out over time.

I'm trying to knock out trades and I have been cutting my market exposure as the stocks I'm holding aren't doing what I would like. I mentioned YPF SA (YPF), Opko Health (OPK) and PBF Energy (PBF) yesterday and I have taken profits in all three into strength. My shopping list of potential buys is shrinking, so I'm becoming less bullish by default. The market is still acting well overall, but individual stocks seem less stable.

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volatility is quite low here, and we could see some downsides here in the short term. ...
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