The indices did a good job of shrugging off the poor earnings news, on Friday, from Alphabet (GOOGL), Microsoft (MSFT) and Starbucks (SBUX), but the momentum has cooled off today and breadth has reversed to nearly 2 to 1 negative. There isn't any key news driving the action, but there seems to be growing concern about the lack of positives.
The S&P 500 is testing Friday's lows as I write, and there doesn't seem to be much interest in dip buying at this juncture. The technical picture of the indices is still in fairly good shape, but around 2075 we have some support that needs to hold.
As I mentioned last week, I've been somewhat bearish by default. My inability to keep finding new buys for my idle capital has forced me to be defensive. Most of the small-caps I'm watching are still holding up fairly well, but the miners and commodities that were the big recent winners are looking tired.
My Stock of the Week, Yirendai (YRD) is off to a good start, and I'll be stalking some additional entry points. It's a China name -- which is always more speculative, but according to IBD's MarketSmith it has an estimate of $2.31 for 2017.
We still aren't seeing any real rush to sell, but buying is also lackluster and there is little dip-buying interest right now. Some corrective action wouldn't seem at all surprising or unhealthy. I'm keeping stops tight, and will be selective with any new buys, at this point.