The bears are ready for this market to finally rollover, but the dip-buyers are active and there is no rush for the exits. A test of Monday's low brought in the buyers, and the indices are at the highs of the day.
Breadth is running slightly negative but there's speculative action in the biotech sector again, and precious metals are regaining their momentum after a bout of profit-taking. Oil, retail and banks are lagging.
Although I'm holding Direxion Daily Small Cap Bear 3X Shares (TZA) as a hedge, I'm staying focused on individual stock picking. AOL (AOL), which has a solid base and is trying to break through $34, is presenting at a Goldman Sachs event tomorrow, which serves as a catalyst.
Patrick Industries (PATK) is involved in the manufactured housing and RV industry. It earned $0.62 per share in its most recent quarter vs. $0.33 last year and is expected to double EPS this year to $1.65. It trades with a trailing price-to-earnings ratio of just 8. The stock is attempting to break through major resistance at $15.
A number of other stocks I'm holding, such as Sarepta (SRPT), Home Loan Servicing Solutions (HLSS), Nanosphere (NSPH) and Smith & Wesson (SWHC), continue to act well but the momentum is slow, so I'm keeping things tight and adding some TZA.
The market is still fine but it looks tired.