The opening gap faded quickly. The bulls tried to bounce back a couple of times but were turned back aggressively. Now the selling is picking up steam.
Uncertainty in Europe is too great for the bulls to get comfortable. As I said the other day, we have a bunch of short-term renters and they are not going to stick around with news flow so poor.
The bulls' biggest positive is that everyone seems to be anticipating something worse coming in Europe, but the problem is that it doesn't feel like the possibility has been fully discounted.
Despite the theory of contrarianism, the crowd is right most of the time. It is only at extremes that they are wrong. While there is plenty of negative talk about Europe, I question whether market players have fully acted on their negativity.
I sold down some of my few longs like CVR Partners (UAN), Merge Healthcare (MRGE) Universal Display (PANL) and a few others. I don't have many longs on my radar right now. I bought some Ariad Pharmaceuticals (ARIA) this morning, which has a solid base, an upgrade and is at a conference, but I'm not being aggressive with my buying.
I have some index shorts on and I'll look at pressing them more after we see what happens on the next bounce attempt, but given the choppiness of the market lately, I'm not inclined to do anything big.