The narrowness of the market action is starting to put some stress on the indices. The big-cap technology names turned quickly after a gap-up open and have not been able to recover as quickly as they have in the past. The indices are off the early lows but breadth is still weak, with about 2,600 gainers to 3,900 decliners. The number of new 12-month lows is up to 200.
Financials are the biggest obstacle for the market today while the defensive pharmaceuticals such as Pfizer (PFE) and Johnson & Johnson (JNJ) are leading. Precious metals and bonds are also up, so there is apparently some rotation out of the FANG names today.
Keep in mind that downside is not going to come too easily to this market. The buyers have been well trained and react reflexively to pullbacks. They are not going to be too worried about protracted downside until there actually is some lasting selling pressure.
The biggest mistake the bears tend to make is being too anticipatory. They want to call a market top at the exact moment it occurs, and as a result they are chronically too early. Impatience is what causes too much anticipation. The best time to get negative is when the price action is poor. Stay with the trend as long as you possible can and change your bias only when there are losses.
My market bias is primarily a function of the stocks I am watching, not the indices. If the stocks are not offering many entries, then I'm not going to be very positive. That is the case right now. I don't see any reason to do much buying. There isn't much momentum out there and the stocks that do bounce aren't producing sustained moves.
This market is not going to die easily. Keep that in mind as you contemplate this action. The bears are always over-anxious and often blinded by their brilliant arguments. Stay focused on the price action, not arguments.