After the poor close on Wednesday there is some tentative buying here on Thursday morning, but it is obvious that market players are feeling a little nervous after the poor reaction to the latest news out of the Federal Reserve. A friendly Fed is a convenient source of optimism, and when the market loses that sort of support it creates a headwind.
Breadth is running slightly negative and there are more new 12-month lows than highs at this writing. Most notable is the weak action in oil, gas and gold. Commodities have some issues as the dollar bounces.
As I discussed in my opening post, one of the most difficult trades in this market is betting on momentum to build to the downside. There is such a strong inclination to dip buying that even a hesitation in the seller seems to produce very aggressive buying.
I've raised quite a bit of cash in the last couple days simply as a function of stops being hit and not finding new names I want to buy. I'm staying selective and don't expect to be very aggressive at this point.
Two stocks I like posted earnings Wednesday night. They are Qualcomm Inc. (QCOM) , which came back very fast after selling off initially on its report, and The Rubicon Project (RUBI) , which is an under-the-radar play on digital advertising. It had a good report but trades thin and initially sold off.
At this juncture I don't see any reason to be in a rush to buy. Strong markets don't suddenly collapse and go straight down. If there really is a turning point developing, it will take time and will provide some false hope before it gives way to the downside.