Dip buyers moved in on the big gap down to start the day, but they lost traction after a bit of a bounce. Those who catch the early move tend to be flippers with very short-term time frames, and they can kill a bounce quickly if they are aggressive with profit-taking.
There's severe pressure overall. Breadth is poor at better than 3 to 1 negative. Oil and chips are leading, but gold is being hit hard on weakness in the euro, and banks and retail are struggling as well.
I continue to believe that dip buyers will provide support, but that doesn't mean we won't have some downside first. It is very choppy out there, and that is keeping buyers sidelined.
I'm primarily focusing on energy names this morning. Cheniere Energy (LNG), which I've discussed previously, is developing nicely and should attract anticipatory breakout buyers as it moves toward $12.
Flotek (FTK), my stock of the week, continues to do well, and now I'm looking at Newpark Resources (NR), which is also in oilfield services. The company is expected to earn $0.80 per share this year and $0.94 in 2012, and it's selling with a trailing price-to-earnings ratio of 13. Technically, it's forming a solid base and just needs to tick up a bit to attract momentum interest.