Long Entries Still Tough

 | Oct 10, 2011 | 10:41 AM EDT
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Volume is running light due to the Columbus Day holiday, but the action that we have is extremely lopsided to the upside. Breadth was running better than 12-to-1 positive early and is still close to 10-to-1 positive. All major sectors are in the green, all the big-cap momentum names are up and the only red is the inverse ETFs and TLT.

All last week I heard traders complain about the lack of favorable long setups and they are squawking even more this morning. This market is not making long entries easy, but that has been a very common theme ever since the low in March 2009. If you want in you almost always have to do some chasing because the underlying dip buyers just never let things fall very much once they start to trend upward.

We are hitting the highs 45 minutes into trading, which bodes well. Technically traders are looking for a follow-through day, which will confirm that change in trend that kicked off last Tuesday with the explosion late in the day. To qualify for a follow-through day and we might not see that today due to the holiday.

I'm trying to put some cash to work but it is quite challenging. I reentered some Mitek Systems (MITK), which is turning back up over its 50-day simple moving average. I bottom fished some Carrizo Oil & Gas (CRZO) as oil is showing some bounce.  Mela Sicences (MELA) is one of my technical picks which should attract some momentum interest as it tests the 6 overhead resistance.

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we will add this here to cheaply protect our downside a bit BOUGHT SPY SEP 244 PUT AT 2.70 ...



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