What we have today is a rotation out of small-cap and speculative names and into conservative big-cap names. Microsoft (MSFT), IBM (IBM) and Intel (INTC) are the main beneficiaries due to their earnings reports, but also Wal-Mart (WMT), Hewlett-Packard (HPQ) and McDonald's (MCD) are seeing buying action.
The bears are hopeful that this is some option expiration game, but the action has the feel of safe-haven buying. That can make the indices look good while many smaller stocks struggle under the surface.
It is probably premature to conclude that a major rotation is taking place, but I'm inclined to be more defensive with small-caps and maybe a bit aggressive with a short of the iShares Russell 2000 (IWM) exchange-traded fund.
One sector catching my eye is gold. The SPDR Gold Trust (GLD) has been consolidating in a narrow range between the 50- and 200-day simple moving averages and seems to have support building after the recent bounce. I'm not seeing any compelling charts, but Jaguar Mining (JAG) and Golden Minerals (AUMN) are on my radar.