Looking Choppy

 | Aug 06, 2012 | 10:20 AM EDT
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Optimism in Europe is providing an upbeat tone to the early trading. There isn't much news flow, but Spain is up big and there is a high level of confidence that the ECB will ride to the rescue as needed.

We have breadth approaching 3-to-1 positive and strength in many major sectors with steel, biotech, oil and retail leading. Silver and natural gas are the laggards.

I expect trading to be thin and choppy, which means that I don't expect momentum to work very well in general. That means I need to shift into very short term trading mode and just try to book some fairly fast gains. I'm inclined to buy weakness for a bounce rather than chase momentum, but the key is flexibility and an open mind. There isn't anything wrong with this market action, but it is hard to have a very high level of trust.

My stock of the week, Ixia (XXIA), is off to a good start. I'm eyeing thinly=traded Blucora (BCOR), which saw earnings rise 165% to 53 cents a share in its most recent quarter and is trading with a P/E of 11. It has been consolidating after a gap up and looks ready to gain some momentum.

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