August is typically a slow month on Wallstreet and the end of July can be a time where professional money managers square up some positions that give them concern before they head off to vacation. This squaring up of positions doesn't mean irrational or violent swings in the markets, but it could mean that companies in what are considered questionable sectors could see some additional selling. The chances of professional investors and money managers taking on more risk heading into August is slim, more likely this is a time to eliminate risk.
One area that comes to mind is Oil. Since the futures market is much more leveraged when it comes to trading, expecting the trend to change and a strong rally to ensue is less likely. There have been talk by the experts on television that technology stocks should benefit the most from oil's decline as money rotates to sectors with stable earnings. Below is a chart of Light Sweet Crude followed by a chart of the Nasdaq 100 Index.
Light Sweet Crude(click to enlarge)
NDX - Nasdaq 100 Index
While oil has had a strong pull back after a great run, it is still in a strong uptrend. Until oil rallies again and fails to make a new high, money will most likely not rotate into other sectors with any strong momentum. One variable to watch effecting the price of oil is the value of the U.S. Dollar. The chart below is of the U.S. Dollar Index. If the dollar starts to weaken again, it could be the spark for another up move in oil.
U.S. Dollar Index
The chart below shows that momentum could be slowing for the down moves experienced this year. It doesn't mean that the market is turning, it does mean that money is looking for advantageous places to go.
NYSE Composite Index(click to enlarge)
One alternative view is that momentum is slowing, it is just that the financial stocks can only go so low, some are counting the days until they hit zero.