The indices were close to flat for the week but it made for challenging trading as they danced to the tune of the U.S. dollar. We were up on a weaker dollar for three days and down sharply on a stronger dollar for two days. Nothing much else mattered, so if you weren't in tune with currencies, you weren't in tune with this market.
Although the indices didn't move much and are still in trading ranges with some underlying support, there is some troubling action under the surface. The trading in key individual names such as AAPL, GS, DE, BIDU, MCP and a host of oil and commodity names was quite poor. There were very few pockets of momentum, and it was most troubling that even on positive days there was a distinct lack of energy.
Another area of concern is the strength in defensive stocks such as PG, CPB, JNJ and PEP. Those aren't names that attract money when people are optimistic about the market. It is where funds park some cash when they have to be invested but want to play it safe.
On the other hand, I don't how many times in the past couple of years we've had a long list of fundamental negatives and weakening technicals but still came roaring back just when it looked like the bears might finally catch a break. Anticipating downside momentum has been a recipe for losses, so it's awfully difficult to have a high level of confidence that now is the time things are going to take a turn for the worse.