Sellers Get an Edge

 | Mar 02, 2012 | 1:44 PM EST
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Maybe the dip-buyers are tired and are leaving early for the weekend. They definitely aren't showing up so far today, and we are seeing some particularly poor action in small-caps, oils and precious metals.

The Nasdaq-100 is still holding up fairly well as Apple (AAPL) remains in positive territory, but breadth has now slipped to 2 to 1 negative with all major sectors red. It has been a while, but the sellers are finally gaining some momentum.

The small-caps have been weak for a couple days now and were sending a warning signal that some speculative interest was cooling off. The big-caps, which are perceived as safer, have attracted some of the money flow from those who are trying to stay invested, but that doesn't last for long once we start to downtick.

Plenty of bulls will be glad to finally see some profit-taking kick in. It has been very difficult to be aggressive with long trades when we have had so little consolidation for so long. A good hard shake will help to set up some new opportunities.

Right now I'm just doing my best to stay out of the way. I've sold down aggressively and may pick at some shorts just in case the bears are finally gaining some traction. We'll see if the dip-buyers make a late showing, but this action feels a bit different, and I'll be surprised if we have a strong reversal back up late in the day.

It may be hard to believe, but the market actually does move in both directions.


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