Still in a Holding Pattern

 | Oct 26, 2011 | 1:27 PM EDT
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The good news is that the indices have stabilized after the quick fade this morning. The bad news is that we still have little clarity out of Europe and we're still at the mercy of the next headline to hit.

The primary sentiment among traders is that we really can't do much until Europe is out of the way and we can focus on individual stocks once again. We have a few things moving on their own fundamentals, but once again the great bulk of stocks are moving according to the big-picture news flow.

I remain optimistic about the market and have a bullish bias, but I'm having a very hard time finding stocks to build up my inventory. There is little leadership, few clear themes and too many small-caps that are drifting around aimlessly. I have identified a number of names I want to pursue, but until they deliver better technical action I'll keep my positions very small.

One chart I'm watching right now is Transcept Pharmaceuticals (TSPT). The stock has made a big move since mid-August and has consolidated for several weeks now. It is starting to turn back up and is holding the 200-day simple moving average.

I see some promise out there, but we are in a holding pattern until we can ignore Europe again.

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volatility is quite low here, and we could see some downsides here in the short term. ...



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