My main positions of AAPL, BAC and C got hit hard today - C's expire in August, so that obviously needs to be watched carefully. The bears gained a little more traction today but the bulls came back late day and managed to close off the lows despite a last minute dip. Breadth improved off very poor levels early in the day but was still solidly negative, with about 1,500 gainers to 4,300 decliners. Biotechnology stocks showed some relative strength, but otherwise all major sectors were negative with banks being a particular sore spot.
The big question now is whether this pause in the market develops into something more severe are is this just the sort of profit-taking and consolidation that will wash out some profit-takers and let more secure dip-buyers jump in.
I continue to believe that the market is not going to crack too easily. We have a bit of a rollover pattern developing particularly in the Nasdaq but we have yet to test any really significant support. The market has been so strong it can afford a fair amount of weakness.
Eventually a more significant downside scenario may develop, but in the near term it is going to be a very hard-fought battle and I look for the bulls to make a few upside forays that are going to squeeze the bears yet again. Don't get too comfortable with this market either way as both sides have some potent ammunition.