We always need to be on watch for a change in the character of the market action. That is what signals a new trend is emerging. One thing that has changed recently is that the dip buyers just aren't showing the same level of interest they did for a very long time.
In the past, the dip buying was so automatic it looked like a reflex. It was probably a function of computer programs to a large degree and was so aggressive that it would occur even without any real dip. That has changed and it is impacting the way the market is trading.
A dip caused by a pullback in Apple (AAPL) would be an almost automatic move. That is working slightly now but with limited vigor. The market bounced back up mostly due to a spike in oil prices. (Apple is part of TheStreet's Action Alerts PLUS portfolio.)
Breadth is running very poor at better than 2-to-1 negative and the real worry is the small-cap indices that are barely holding key support levels. The 120 level of the Russell 2000 ETF (IWM) is of particular importance.
I've been primarily focused on defense, but I did add to a longer-term position in Vonage (VG) . I highlighted this one a month or so ago and the story is still solid. Technically, the stock has a very nice-looking cup-with-handle pattern formation since November. I think that will attract attention. That may also help Twilio (TWLO) , which has some similar technology. Natural-gas plays are of some interest and I'm watching Approach Resources (AREX) .
There is a little bounce in biotechnology today, which has been under pressure for a while, but it needs to prove itself better before I'm willing to do much there.
I complained quite a bit yesterday about the market being a very tough slog. It is probably better that we have further weakness at this point rather than another half-hearted attempt at a rally. This market has presented mediocre action for way too long and it may be better if just breaks down and gets it over with so we can rally into the end of the year.
