The market has been hinting recently at greater weakness, so it isn't surprising that we had a gap down to start the week after news of problems with Greek and Italian sovereign debt. What is surprising is that we just sat all day and did nothing more. The bulls couldn't bounce us and the bears couldn't make another low. We just meandered around aimlessly on around 4-to-1 negative breadth, which made it impossible to do much in either direction.
The bad news is that the S&P 500 broke below the 50-day simple moving average and is threatening the uptrend line that has been in place since August. We still aren't far from recent highs, but we've had a series of lower highs and a couple failed bounces, so it looks like a downtrend is starting to take firmer hold.
The fact that there was so little dip-buying interest and no real bounce after the intense early selling is worrisome. We should see the bargain hunters showing better interest, but they stood aside and didn't do much other than take a stab at a few things like AAPL and CMG.
The fact that there's no leadership other than a few defensive names tells you that there's no big rush to jump in. When things improve, we should have some leadership emerge and then it will broaden as market players regain confidence. Right now, there is nothing they really want to hold and most of the positive action is just some oversold bounces in stocks that have been hit very hard.