The gap-down open brought in the dip buyers, but they aren't as energetic as we have seen in the past. The dip-buying algorithms keep doing what works, but the problem is that there are more sellers looking to reduce positions into the moves that the computers create.
Breadth is running about 2,350 gainers to 3,700 decliners and there are slightly more 12-month lows than highs. The biggest negative is that lack of action in individual stocks. As I discussed yesterday and again in this morning's opener, this action is more index-driven than stock-driven. That situation is continuing today. There are very few pockets of momentum.
One group that continues to outperform is China-related names. Bitauto Holdings Ltd. (BITA) , a recent Stock of the Week, Sina Corp. (SINA) and small-cap Phoenix New Media Ltd. (FENG) are good examples, but it is very sparse pickings if you are focused on trading individual stocks.
July home sales data came in substantially under estimates but haven't triggered much of a response. I suspect that is due to the old idea that weak economic reports are positive because they will keep the Fed dovish.
I'm looking to put back on some index shorts if the indices take out their early lows. For the S&P 500, that would be around 2441 level. There is very little of interest on my screen as far as individual stocks.