Since the gap down to start the day, we've been sitting in a one-point trading range: 119.08 and 118.08 on the SPDR S&P 500 (SPY). The bulls have made a couple tries to break out to the upside but didn't have much energy, but they are lively enough to keep us from retesting the day lows so far. It should be a good setup for a last-hour move, when the machines kick into high gear.
Overall, the average stock is not acting well at all, and I don't feel much need to hurry up and start averaging into bargains. I'm afraid many of these things that have bounced recently are going to be retesting the lows we saw in August.
I continue to focus most of my energy on the gold miners. Jaguar Mining (JAG) and Minefinders (MFN) are in breakout territory, and silver play Alexco (AXU) appeals to me on the basis of some very strong-looking earnings estimates. I expect continued talk about QE3 to keep a bid under precious metals, and I'll be looking to add to miners later in the day.
The important thing right now is to just be patient and stay selective. There is nothing to indicate that the market is ready to turn back up. On the contrary, the news flow, both in the U.S. and Europe, is going to keep many folks on the sidelines. The contrarians will be talking about what a wonderful time it is to buy, but fighting this sort of sentiment and the negative momentum is a tough way to make money. There are trades to be had, but you should be a renter and not an investor.