The market has been amazingly resilient lately, but it finally succumbed to a little profit-taking in the last 90 minutes of the session. The S&P 500 still managed to close in positive territory, so it wasn't exactly a huge rush for the exits, but the IWM, which has been leading lately, reversed a bit more aggressively.
Though the mood has been upbeat, the recent market rise has come on increasingly suspect internals. Volume hasn't been anything special and breadth has not been able to push to the 2-to-1 positive levels you normally associate with a strong trend. However, shorting this market has been an exercise in futility. The market keeps drifting higher and dip buying had been very consistent until late this afternoon.
There is a lot of anecdotal evidence being tossed around by the bears that market players are so bullish that it must be a contrary indicator. The action has been very sanguine lately, but I'm not convinced that it is so excessive that it will set the stage for a major pullback. We definitely could use a rest, but the dip buyers will likely be lurking at first. They will need to be slapped down a couple times before the bears have a real chance at gaining any downside momentum.
It appears that the bears may finally have a chance to put a few points on the board, but they are so far behind at this point that it is going to take much more than a down day or two to really turn the tide.