It was an uneventful day of profit taking. The bears finally managed to put a few points on the board, but there wasn't anything very significant about it. After steady pressure all morning, we found support at mid-day and then drifted up a little into the close. Volume was lighter but breadth was poor with about 1,525 gainers to 4,100 decliners. All major sectors were in the red.
The question we have to contemplate after a day like this is whether it is just some healthy profit taking after a good run or the start of something more serious. It is a little troubling to see leadership names such as AAPL, PCLN, VMW and the like acting poorly, but we still haven't had a lot of major breakdowns. Most stocks and major indices are still holding key support levels.
There isn't any compelling reason to be a raging bear. The S&P500 is still above key support levels and I wouldn't start to worry too much until we are under 1125.
I suspect we are going to stay choppy and then earnings season will help determine which way we go from there. There are concerns that expectations are too high for the third quarter, so maybe we'll price that in a little now.