There is a tendency to exaggerate the first bout of broad market weakness that you see after a sustained push higher. In 2013, we have yet to see any type of aggressively selling on the major indices. To be sure though, upside momentum has slowed down over the past few sessions, and the leading small caps in the Russell 2000 experiencing weakness was one of the first signs to lock in some hard-fought gains and reevaluate. Since then, the rest of the market has dipped slightly, though underneath the surface a bunch of momentum stocks have signaled they need more time to form tighter price setups before breaking out.
The main issue for me is focusing on the intermediate-term trend, which is clearly bullish until proven otherwise. I am currently sitting on a heavy cash position after selling into strength over the past week, but have a list of stocks I am willing to quickly buy if the market firms up as early as this afternoon. For now, I am keeping an eye on those small caps to see if they weaken further. Although we could easily see another rotation into the Nasdaq, I suspect a deeper Russell correction will postpone that.