For a second straight day, the market had generally positive action -- but also a few negatives. The indices held up well and breadth was solid, but there were quite a few intraday reversals after a brief spike higher early in the day.
That's because there is greater inclination to sell into strength and not as much chasing. A huge number of stocks are hitting 12-month highs, but increased instability in many names is causing problems for the bulls, who were cruising along for a while.
I find it particularly interesting that folks who have been bears for weeks sound less negative now. Capitulation by the bears is one of those contrary indicators that causes you to wonder if we are in for rocky action. This market has been a bear killer all year and what is surprising is that there are any shorts left. It's rather ironic as we had very ugly action in a few places today like Rackspace (RAX), Cliffs Natural (CLF) and Deere (DE).
I'm leaning toward declaring that a topping process has started, but the market keeps coming back just when it starts to crack. The bulls deserve some respect and I'm going to stick with them until they falter a bit more. Now all I have to do is find some new buys.
Have a good evening. I'll see you tomorrow.