It was an ugly day but what was most notable about the action was how quickly the mood shifted away from Friday's euphoria over the DJIA at 14,000, talk about the return of the individual investor and stories about how the jobs news and GDP numbers were quite good (though below expectations).
That market suffered steady selling and ended with a very ugly finish. As I commented recently, weak closes are problematic and tend to indicate that a change in market character is developing. We did not see a single weak finish this year until two days last week. Today marks the third poor finish in four days.
If you are looking for a positive spin, then we can focus on volume, which wasn't very heavy, and the lack of panic signals. On the other hand, the poor breadth and the fact that we had no dip buying are not good signs.
I've been complaining too much today about not finding many stocks that I'm willing to buy, but that tends to occur just as the market starts to struggle. It has not been easy to find good leaders lately, and the lack of real enthusiasm among individual investors has been another indication that maybe momentum is cooling.
While this was definitely a rough day for the bulls, it wasn't quite bad enough to declare that the uptrend is over. We need to raise caution and tighten stops, but at this point, this is just healthy profit taking in a slightly extended market. The bulls still have the edge, although they are looking a bit like the Ravens did early in the fourth quarter last night.
Have a good evening. I'll see you tomorrow.