Leaders turn shaky, signal more declines

The stock market�s opening gap up was sold into Monday as news of the bailout of Spanish banks failed to convince Spanish bondholders that anything of substance had changed. As a result, the yield on Spanish 10s went up 29 basis points to 6.51%.

That left the S&P 500 SPX �and Nasdaq Composite COMP with outside days on their charts.

Last week, shares had finally begun to rise on bad news. This occurred as the S&P 500 on Wednesday put in a major accumulation day, or a session of clear buying by institutional players.

At the same time, last week was a constructive one for the glamours, as many put in their fifth week of base-building and a few broke out. This was the first sign of a warming of the speculative sentiment.

Monday, however, saw nearly 98% of all glamours in the red. Of prominent interest has, and will be, those that have already broken out of bases. This provides a real-time snapshot of market sentiment and, in particular, the speculative sentiment.

From here on out, the market's reaction to each day's news, the price/volume behavior of the averages, and the action of the leaders will provide the best evidence of whether the five-day rally is the real McCoy. Of import will be a major accumulation day in one or more of the averages.

Among the names, Dunkin' Brands Group DNKN broke out of a base Monday on volume 29% above average before meeting up with sellers, forcing it back below the line.

Under Armour UA , noted Thursday just before it cleared a symmetrical seven-week base, was shoved back to its base top on Monday by sellers. If fundamentally sound outfits with dynamic growth prospects cannot follow through on their breakouts or begin to break down out of their bases, this will likely set the table for a larger market decline.

Meanwhile, UA gets put on the list of early breakouts, along with Pharmacyclics PCYC and Petsmart PETM , to monitor for sentiment purposes.

Mellanox Technologies MLNX , the only glamour up in Monday's session, stalled after hitting new-high turf, another casualty in the sentiment reversal.

The Fresh Market TFM is another of the vogue titles that could not hold its breakout. With about $20 million in average daily dollar volume, it is not the most liquid issue, but is nevertheless held by large investors, and thus its action says something about big-player sentiment.

Ulta Salon ULTA wasn't immune from Monday's liquidation. It is possible the stock rebuilds in this area and then reattempts a breakout in coming days/weeks.