The first real positive economic news in a while caught market players by surprise and now we are seeing a chase/squeeze kick in. After the disappointing Chicago PMI number the other day, many anticipated that the ISM, which is a similar measure, would be soft as well. Not only was the ISM number strong, but every aspect of it was positive.
After the lethargic action yesterday, many traders weren't well positioned for a sudden spike. Instead, they have to chase and cover shorts and that tends to feed on itself and send the market higher. Breadth is running better than 3-to-1 positives. Solar energy and chips are leading, while gold is the laggard. There isn't any really outstanding sector strength, but it is obvious that there is sudden anxiety over being underinvested.
My main charting program is down this morning, which has really handicapped my trading. I'm inclined to take some Apple (AAPL), which I think will continue to run now that there is a spark of momentum.
NetQin Mobile (NQ), my stock of the week, has a great looking chart and needs to shake a persistent seller. I'm also looking to add back to another recent favorite, Velti (VELT), which is involved in smartphone advertising and is looking to grow earnings 48% to $0.74 this year and to $1.01 in 2013. This stock is turning back up and I'm looking for its momentum to build.
Editor's Links
More from James "Rev Shark" DePorre:
