Another Change in Character

TheStreet.com

Once again, we have evidence that the character of the market action is shifting to bearish. We had an almost euphoric response to the better-than-expected ISM report, but all the major indices except for the Dow have given back the entire gain and more. The DJIA is covering some poor action in the Nasdaq and the Russell 2000, both of which are now in the red.

We have had quite a few intraday reversals in the last seven or so trading days, and this is a new development. Typically, once the bulls are running, we have had trend days. Anyone who tried to fade the strength was crushed, but the bears are having much more success later.

What continues to be the most glaring problem with this market is how poorly some key stocks are acting. Key names such as Apple AAPL , LinkedIn LNKD , Cirrus Logic CRUS and SolarWinds SWI are weak, and there are very few pockets of momentum to be found. Homebuilders, which were recent leaders, have now broken down, and probably the best-looking sector right now is precious metals.

I'm very wary of the market and am staying very selective with any buys. One new purchase today is Synta Pharmaceuticals SNTA , which is coming out of a very nice-looking base on substantial volume. I don't have much else on my radar. In fact, the vast majority of stocks I'm watching are well off their early highs and are steadily losing momentum.

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