After yesterday's euphoric action, the market is as flat as a pancake today as it ignores a much poorer-than-expected jobs report. Hope that the weak numbers will spark QE3 are keeping a bid under the market, but with warnings from Intel (INTC) and FedEx (FDX) and the lousy jobs growth you have to wonder where corporate profits are heading. It is nice to have the Fed helping out, but the reason for doing so is that conditions stink and that isn't very inspiring.
Despite the flat action in the indices, breadth is strong and running 2-to-1 positive on the NYSE. Precious metals are leading, as they are the "go-to" group on any hopes for additional quantitative easing. Steel, coal and other commodities are also doing well, while chips and biotech lag. Google (GOOG), Amazon (AMZN), Priceline (PCLN) and other big-caps are performing well, as those are the names where underinvested bulls tend to go when they are lagging and hoping to catch some performance.
Overall, it isn't bad action and it demonstrates why it is usually a mistake to fight momentum. Markets that act like this may pause and rest a bit, but they generally don't just suddenly fall apart.
I have not been too active so far today. I added Home Loan Servicing Solutions (HLSS) to the Sharkfolio on a secondary offering. As I have mentioned before, I believe the mortgage-servicing companies may benefit from mortgage-bond buying as part of QE3. LinkedIn (LNKD), Kors (KORS), Direxion Daily Gold Miners Bull 3X Shares (NUGT), Cheniere Energy (LNG) and Golden Minerals Co. (AUMN) are acting well and I have a technical buy on Celsion (CLSN) this morning.
Manage your stops and be disciplined about taking profits, but there is no reason to be overly bearish.
At the time of publication, Rev Shark was long HLSS, LNKD, KORS, NUGT, LNG, CLSN and AUMN, although positions may change at any time.
