Trust Level Is Low

 | Jun 27, 2012 | 10:40 AM EDT
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Opening strength invited a little selling, but better-than-expected pending home sales brought in some buyers. There's probably enough negativity and cash on the sidelines to spike the market a bit, especially as market players watch for headlines out of Europe.

I don't trust this market very much, but oversold bounces and spikes are tradable and you should take advantage while you can. Just make sure you are very clear on holding periods and stay disciplined. The last thing you want to do in a market like this is allow trades to turn into investments.

My stock of the week, Nationstar Mortgage Holdings (NSM), is perking up on the housing data. It services mortgage loans, so better pending sales is good for business. The stock has good early volume and is heading for resistance at the $20 level.

Amarin (AMRN), which I've mentioned often, has important patent news that I believe will take it higher over time. There is likely to be some profit-taking on the move but I'll be looking to add as it finds area of support.

VirnetX Holding (VHC) is another one I've discussed quite a bit and it continues to run on speculation that it may settle some of its major litigation against the likes of Apple (AAPL) and Cisco (CSCO).

LeapFrog (LF), a Shark technical pick, is trying to come out of a nice base but needs volume to gain momentum.

I don't believe that the market downtrend has ended, but we might as well try to knock out trades in the very short term. Just don't drink the Kool-Aid the media will try to sell when we see any positive action.

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