The action out there today is weak, sloppy and uninteresting but that is probably the best thing the market could do right now. The market become overheated and needed to cool off and so far the selling is not gaining any traction.
Breadth is still running close to 3-4 negative but the number of new 12-month lows is accelerating quickly and is at around 165 at the moment, and exceeds the new 12-month highs which is at 125. That is a very quick shift for a market that was flying higher for a week and is a reflection of how small caps had lagged.
There are plenty of stocks looking 'okay' but the issue with buys at this point is whether there will be follow through. Buying a stock at a support level doesn't work well if the market isn't helping to push it higher. When the market weakens there aren't many individual issues that buck the trend.
The current action is a good illustration of why I cultivate a reactive approach to the market. I really have no idea what is going to happen next. The best way for me to catch a good trade isn't to guess and try to anticipate. It is better to simply wait for some clues that a move is developing and then act quickly.
The reactive approach often doesn't receive much credit from traditional Wall Street. Predictions and forecasts are what they sell, and when you say you don't know what is going to happen it is harder to market what you do.
My best advice is to not be a bull or bear right now. Just wait and see what happens. The market will tell us when it is time to make more aggressive moves. Right now it is telling us to sit back, relax and don't pretend you know the future.