Warning Signs in the Air

This article originally appeared on RealMoney.com on Sept. 3, 2014 at 4:43 p.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.

The DJIA and S&P 500 didn't do much today but the action under the surface was problematic. The Nasdaq and Russell 2000 lagged, and a number of momentum stocks, most notably Apple  (AAPL) , took hits. It wasn't an across-the-board bloodbath, but there was enough weakness to cause concern.

It doesn't seem reasonable that we finally experience a little selling after a straight-up move over the last month or so. We've barely seen a pullback and the market is unquestionably extended on light volume. Predicting a pullback seems like an easy call, especially with seasonality turning negative.

The dilemma is that this market has treated caution quite harshly. Those who take profits and looks for downside have been consistently whipsawed. Even when there is poor action, it tends to reverse quickly and makes prudent profit-taking seem foolish.

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Markets that have been acting like this one don't go down easily. They tend to stay sticky to the upside, but twice this year we have had "stealth" corrections where small-caps and momentum names were punished while the senior indices barely blinked. Some of the action today was reminiscent of that, and that pushed me to hit the sell button in quite a few cases.

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