Market players are used to very quick bounces as dip buyers jump on even minor weakness, so a day like today can feel much more negative than it really is. The dip buyers did well on the open yesterday, but the weak close has cooled them off a bit this morning.
The main problem today is that breadth has turned down and is now running around 2-to-1 negative. We still have gold and mining running, but oils reversed hard and Amazon (AMZN) is pulling back steadily after the huge gap. There still isn't much interest in big-cap technology despite the efforts of Facebook (FB) and AMZN. (Facebook is part of TheStreet's Action Alerts PLUS portfolio. Amazon is part of the Growth Seeker portfolio.)
Action like this tends to get the bears very excited very quickly. They want to declare that it's the start of the long-awaited correction and tend to conclude that routine pullbacks are something much more dire. The big problem the bears have had is the inability to produce sustained downside momentum. They have a victory or two and are unable to build on it. The problem is that they aren't a match for the central bankers who are sure to pop up very fast when there is any weakness.
Right now the Bank of Japan gave the bears a little opening. That is compounded by some rotational action, but I don't yet see any major change in market character. In fact, I'll be looking for some dovish comments in the next week or so to put a bid back under the market.
At this point, all I see is some healthy corrective action. It used to be pretty routine in the old days when the dip buyers weren't so aggressive, but the structure of the market has shifted and now even minor weakness is viewed as a major event since it is so rare.
I'm not doing much today, but I do like that a number of individual charts are pulling back. Names such as recent stocks of the week DRD Gold (DRD) and Teck Resources (TCK) are going parabolic, but outside of that there isn't much of interest right now.