The big-picture worries the market ignored last week are starting to matter this morning, and the weaker-than-expected Chicago PMI number isn't helping. Virtually all the recent economic reports have missed expectations lately and we already have the numbers coming down for the monthly jobs report due out on Friday.
Apple (AAPL) has returned to its pre-earnings behavior and continues to drip lower with no signs of support. However, the DJIA is showing some relative strength and that is keeping a bid under the market. Breadth is poor at around 2-to-1 negative with biotech and oil leading while precious metals and banks lag.
The market is technically extended and vulnerable and with Apple, Google (GOOG) and many of the leadership stocks weak. I wouldn't be surprised to see the downside play out further, but what I do like is that there is some stock picking taking place and the hot money is gravitating into some select names like Francesca's Holdings (FRAN), Amarin (AMRN), Sturm Ruger (RGR) and TGC Industries (TGE).
I don't like the feel of the action today, and I'm being highly selective and playing it tight. If the market retests early lows, all bets are off and I'll be hitting the eject button quickly.
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