Friday is looking like a day of profit-taking and consolidation after a three-day run that caught quite a few folks by surprise. The poor positioning probably help to push the market a bit further than warranted, but that's what happens when bad news -- like the fact that the Federal Reserve didn't implement a third round of quantitative easing -- turns out not to matter.
I don't see any reason to believe we should jump to conclusion that the market is topping out. The major indices just need to digest the recent gains and allow the short-term traders to lock in their profits. It still looks like the market has some underlying support, and some dip-buying interest, and there doesn't appear to be any panic selling. So far, it is just a routine pullback after a decent run.
I also continue to find opportunities in the small biotechs. Horizon Pharma (HZNP) is one I'm trading today into news from the Food and Drug Administration next week.
Although Google (GOOG) is acting well on earnings, technology stocks are not showing much follow-through after the big move Thursday, and I'm hesitant to do much with that group.
Overall, this is a market fit for some quick, short-term trades. I don't see any reason to be unduly bearish, but you have to be very selective with your long buys.