All You Need Is Churn

 | Jan 04, 2013 | 11:08 AM EST
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The market is holding up well following solid jobs numbers and a better-than-expect ISM services report, but random and poor action in Apple (AAPL) is keeping things suppressed. Small-caps continue to perform well, which is why breadth is running almost 2 to 1 positive on the Nasdaq. Biotechnology, oil, solar, builders and bulk shipping are leading while gold, silver, chips and coal lag.

After the run of the past few days, churning action is exactly what we need. Stocks need to consolidate and let the flippers exit. Many fund managers refuse to chase, and action like this allows them to inch in and give stocks better support.

I know some bears are anxious to put on shorts, but one of my resolutions for the new year is not go to the short side until I see actual weakness. It has consistently been a mistake when I try to be anticipatory about calling market turns. I want the market to show real selling pressure before I take a more bearish stance.

I continue to dig for places to put some cash. This morning I've been trading Uni-Pixel (UNXL), which I've mentioned before, and I put small oil play, Halcon Resources (HK), in the Sharkfolio. I continue to be very selective and have plenty of cash on hand.

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