The euro has lost all of Tuesday's gains and is putting pressure on the U.S. market. We were a bit overbought, and the bulls may have been a bit sanguine about positive seasonality, which is preventing us from gaining much traction.
Breadth is better than 2-to-1 negative, with just precious metals in the green. There is some interest in small oils again due to concerns of an Iran oil embargo. Flotek (FTK), one I've mentioned quite a few times, is breaking out on good volume.
I'm playing a few small-cap names, such as FTK and InvenSense (INVN), but as I mentioned earlier, I'm looking harder on the short side. I've been building a short position in Under Armour (UA), for example, and I will be looking at consumer-related names if gasoline prices start to reflect the higher oil prices we are seeing lately.
This market is ready for some rest, and with so little leadership, it's probably a good time to manage long positions very tightly.