To Vinny Catalano, chief investment strategist at Blue Marble Research, Wall Street is in the midst of a bear-market rally.
"If you look at the price action, it looks like your classic 'two steps forward, one step back' that usually leads to another drop," he says. "I'd expect more drifting around with an upward bias for the rest of August," but "as we get into September and October, things get dicier."
While he believes the problems with the financials are far from over, others are watching small-caps and mid-caps, which have been leading the market of late but may be showing signs of tiring.
Catalano points out that "recently, mid-cap growth has begun to falter," perhaps a signal that the sector is losing steam.But Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, notes that "the uptrend that started in July looks to be still in place, even though we're in the summer doldrums," largely because "small-cap and technology had a huge week