The Pullback Didn't Come Today

After five positive days in a row that took the S&P 500 near its highs of the year, we had a very mixed day of action. Volume slowed a bit once again, and breadth was poor with about 2,200 advancers to 3,550 decliners, but some big-cap strength helped to hold the indices near the flat line.

The bullish argument here is that this is just some healthy consolidation after a big move and that we will set up for an assault at 1100 on the S&P 500. While we didn't continue the recent strong momentum, we didn't see much selling either.

The bearish argument at this point is a bit less compelling. We are seeing relatively poor action in small stocks, and the IWM is definitely looking vulnerable, but that doesn't mean that the big-caps won't keep on driving the major indices.

The strongest-acting stocks tend to be quite extended - maybe - on low volume, and there is very little that is consolidating for another leg up. If you want in, you have to be willing to chase bounces into resistance.

The major indices look much better than the average individual stock, and that is what makes this market quite tricky. The bulls are still in control, but this market isn't nearly as easy as it looks...