Investors are staying defensive, and stocks are being hurt by rising bond yields. If interest rates rise, which is looks like they might, it could seriously hurt the all the M&A activity that has driven this strong market. So many of the deals have been heavily debt-financed, and higher rates could really hurt the companies involved.
The big investment banks are showing positive numbers, most likely from all the deals they've been brokering last quarter. Lehman (LEH) and Goldman (GS) are both moving higher today, even though the market is trading lower.
I'm still in favor of the ETF's that are inverse to the market as a way to make money on any drops. (DOG) and (DXD) are short the DOW.
If rate volatility levels off and the Fed indicates that it won't raise rates, then I would see that as a good time to find some stocks to buy. In the near term, I'd stick with the momentum.