The pattern of the action today is one we've seen several times so far this year. The opening strength is sold, but then once we go negative, the dip-buyers jump in and move us back to flat, which is where we close. The dip-buying is working, but the buyers are flipping for pennies, and that prevents any momentum from building.
I don't know how many times the dip-buyers have saved this market recently, but they use up a lot of energy doing it, and we aren't seeing any big rewards. Sooner or later, they are going to have second thoughts about it, and that is when we have to watch for more severe downside to develop.
Right now, the action is just very well mixed. Breadth is flat, and there is plenty of random movement. There aren't a lot of big movers in either direction. The good news is that stock-picking is working, and if you are selective, there are trades to be had. At least we don't have that heavily correlated action that drove many traders crazy in the latter half of 2011.
A new buy on my list today is Spirit Airlines (SAVE), which is perking up after a secondary offering the other day. The stock needs to move through that $17 level now to bring in buyers. Akorn (AKRX) is another pattern of interest. The stock has been basing for nearly two months and is looking to challenge the upper end of the range. A move through $11.60 or so should bring in anticipatory breakout buyers.