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Pro: Here's the S&P level to watch

August market action reminds me of that famous Otis Redding song, "Sitting on the Dock of the Bay."

And that is what it feels like: the tide rolls in and then it rolls out, churning and churning with no real action as the sun sets on another day.

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Stocks bounced around again on either side of being unchanged as little corporate or economic news caused investors to sit this one out. And though we are knee deep in the summer doldrums, we continue to see some consolidation take place as the market breadth narrows.

During the past week or so, we have seen five "Hindenburg Omens." While one is usually enough to cause a bit of angst, five of them are enough to cause caution in the weeks ahead. You see, when we get one signal, chances run at about 77 percent that a near-term pullback of about 5 percent is ahead.

So five of them is causing a bit of a stir as we move into a usually weaker period from mid-August to October dominated by broader policy issues facing the nation.

Listen, as we all realize, current action 18 percent year-to-date is nothing to dismiss, but some strategists are growing a bit wary.

With 2Q earnings essentially all reported—companies are showing a 2.2 percent yearly profit growth—well below the 3.4 percent rate in the 1Q. And with the market trading at some 15.2 times earnings it appears that we are disconnected from the broader fundamentals.

So in this environment—large asset managers are taking a bit of money off the table (maintain a core position while taking advantage of prices that they deem may be a bit inflated) in preparation for putting it back to work at better (lower) prices.

On Monday morning, we saw futures gap down 6 points, piercing the 1,680 level only to churn and then erase the loss. Kind of like the tide, it rolls out and then it rolls in again. The resiliency has become a 2013 character trait, causing some to think that we will "never see another down day." Oh, boy. Here we go.

The S&P ended Monday's session at 1,687, just below the uptrend line of 1,692.

The S&P futures were 5 points higher at 1,692 and it will interesting to see if we hold that level and attempt a rally into 1,700.

Volumes remain light and moves can be exaggerated as a result, expect natural sellers at 1,700 as the asset managers continue to take advantage of stock specific moves. If they sense that the bulls really want 'em, then watch for a rally to the 2013 highs of 1,709, but I do not see that today.

Remember, 1,670 is still the level to watch for the broader S&P as we look for real support, remaining in the 1,670/1,700 range seems to be the call.

Linguine with herb pesto and grilled shrimp

I love pesto in the summer, as it is easy to make and you get the ingredients right from your garden. Today's pesto is a combination of basil, arugula and parsley, lemon juice, pignoli nuts, grated parmigiana cheese, garlic and olive oil. (You can also add in spinach if you like.)

Begin by making the usual pesto in the blender. Add the garlic cloves, the basil, arugula, parsley and olive oil. Blend ... Next add 1 tablespoon of fresh squeezed lemon juice, pignoli nuts (lightly toasted) and the cheese. You can add some pepper—but do not add salt—the cheese takes care of that. Make sure you add enough oil so that it is not "pasty." Set aside.

Bring a pot of salted water to a rolling boil. Add the linguine (you can use any type of pasta you prefer—but linguine is always good with this—I mean—How can you go wrong?)

Cook for eight minutes. Strain—always reserving a mugful of pasta water to re-moisten.

While this is boiling—heat up a large saute pan and add a bit of olive oil. When nice and hot—add in the seasoned large, cleaned and de-veined shrimp. (Season with just S&P.) Cook over med heat until they are nice and pink. Reduce heat to low and add the linguine to the saute pan and combine. Now add in a couple of scoops of the herb pesto and toss well to coat. If it looks a bit dry—then add in a bit of the pasta water. Turn off heat.

Serve immediately with toasted garlic bread and your favorite summer Rose. Try the Sancerre from the Raimbault Vineyards. This Rose is made from Pinot Noir and is created by lightly pressing the grapes right after the harvest. It's pink color has a light summer fruit bouquet complemented by a burst of raspberry flavor and is a "must have" for the summer season. Retails for about $20.

—By Kenny Polcari, director of NYSE floor operations, O'Neil Securities and CNBC contributor, often appearing on "Power Lunch."

You can follow Kenny on Twitter @kennypolcari and visit him at kennypolcari.com.

Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities, Incorporated or its affiliates. The author is not compensated by CNBC for this or any other written materials found on CNBC.com.

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