I'm disappointed that we aren't seeing a stronger reaction to European news this morning. It doesn't really matter if we are up or down as long as we see stronger emotions and more aggressive trading. We are ticking up and breadth is good so far, but the mood is sedate and there isn't any urgency to the buying. I was expecting some "sell the news" action, and that may be why it's slow, but the buyers need to show more conviction before I get aggressive.
We have oil and banks leading, and chips are weak on the guidance cuts from Texas Instruments (TXN) and Altera (ALTR). Big-cap momentum names are holding, but not gaining much traction. Breadth is good, but buying is tentative. I would not be surprised to see a quick dip intraday.
If we can hold in positive territory and get dip-buying support, that should bring in buyers worried that the end of the rally is on and they may miss out if they don't add exposure. I continue to believe that the biggest positive is that there has been enough worry and skepticism to keep folks underinvested. If we start to trend up, especially if we take out the 1263 level of the S&P 500, which is resistance at the 200-day moving average, they will start to chase.
I'm looking hard for more long exposure, but with the light volume, it isn't easy to be aggressive. We don't have enough life to trust the momentum. I like some of the setups that are developing, and I'm likely to be a buyer later in the day if the market continues to hold up.