The dip-buyers continue to do what works and jumped on the early weakness, but they will need to push much harder to shake off the selling pressure. Early breadth is quite poor at around 3-to-1 negative, and all sectors are in the red. The bounce is already fizzling out as the early buys quickly flipped to lock in small gains.
The key from a technical standpoint is that we hold above the opening lows. If we don't do that, stops will trigger and the bears will push a harder as they sense weakness in the dip-buyers. We definitely aren't coming back as sharply as we have so often, but this tenacious underlying support has been frustrating the bulls.
I'm taking a more defensive stance here as a product of not finding setups with much energy. There are some patterns I like, such as InvenSense (INVN), but I want to see some strength before pursuing it more aggressively.
I am doing some minor bottom fishing. I added Clean Diesel Technology (CDTI) to the sharkfolio as it has pulled back to support at the 200-day simple moving average after gapping up big on good earnings a couple weeks ago. This is an interesting play on emission control systems for diesel vehicles. It recently won a number of contracts and seems to be gaining operation momentum. I like the light-volume pullback to support following the spike.
I'll be looking for more pullback plays on market weakness but at this point the vast majority of charts are still very extended and it is going to take more than a few hours of weakness to set them up.
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