This is the first post from the new Off The Street blog. I'll be posting my thoughts about the markets and anything else that pops up on my radar screen from my daily reading. We're hoping to get some guest posts as well so if you're a blogger out there looking for another outlet for your content, let me know.

So, we're getting a bit of a pullback today and the question on everyone's mind is whether this is just another of the paltry pullbacks we've seen during this amazing run or something more substantial. If you've been reading my weekly updates you know I'm leaning bearish and have been since early this year. I'm not one of those all or nothing kind of guys though so that just means I've been holding more cash than normal and my stock account is lagging a bit. But this correction has me more concerned than anything we've seen so far this year due to a significant deterioration in some leading sectors.

The trade of choice up until last week has been the dividend trade. Anything and everything with a dividend higher than the 10 year Treasury Note yield has seen a persistent bid with utilities and REITs leading the charge. With interest rates backing up over the last week, based on fears of the end of QE I suppose, those sectors have taken it on the chin:

Consumer staples, another dividend favorite, haven't taken the same hit - yet - but are arguably more overvalued than the utilities and REITs. These companies have a much greater representation in the S&P 500 so if they break support the averages will probably follow suit. It is somewhat odd for stocks of what are normally considered "safe" stocks to be leading the correction but what leads on the way up often leads on the way down and this is where the action has been:

I don't know if this is the long awaited and much desired correction, something more or just another opportunity to get long and neither does anyone else. It is possible that we will just see a shift in leadership to another sector. if rates are rising due to rising growth expectations, more cyclical sectors might start to rally and we've seen some of that. Based on the recent data though I have a hard time believing that is the prime mover. The economic data has been slightly better, especially the housing data, but manufacturing has been a major disappointment. The minor sell off we've seen so far would seem to be more driven by changing expectations with regard to Fed policy and the perception that Bernanke is getting uncomfortable with the rise in stocks and other risk assets. 

Sentiment is also at extremes we haven't seen in a long time. Bears in the AAII poll are down to the low 20s while bulls are up around 50%. Margin debt is sitting at all time highs and option traders are conspicuously bullish. Squeezing the shorts is all the rage with stocks like Tesla and Netflix making big moves based on not much. On top of that, stocks are not exactly cheap, trading at about 15 times what I believe are very optimistic estimates of earnings in the back half of the year. From a technical standpoint, we had a key reversal last Wednesday that often marks some kind of top. If we get some follow through to the downside, it will be interesting to see if all the people who claim they want to buy the dip have the guts to actually pull the trigger. Let's just say, I have my doubts.