The opening strength wasn't sold this time, and the market has finally managed a better bounce. Unfortunately the churning over the last four days has removed some of the spring, but buyers are finally chasing a bit, and so far the major indices are holding up.
Breadth is quite strong, at better than 3-to-1 positive. Biotech, home builders, chipmakers and most commodities are performing well -- and, on the other side, gold is the biggest laggard. Apple (AAPL) is in the green, but it continues to struggle as it tries to regain some of its luster.
We're seeing some chaotic trading off earnings, with traders selling strong reports like those from Cirrus Logic (CRUS) and Ellie Mae (ELLI). That isn't too surprising, however, as earnings chases have been a minefield this quarter.
From a trading standpoint, this sort of bouncing action we're seeing this morning is challenging, because the technical setups are not very strong. If you are a trend-follower, the first day of strength will almost always have you very underinvested, as nothing has really had a chance to form a good pattern.
There doesn't seem to be much confidence that this bounce will last long, and with the jobs report due Friday the morning and the presidential election coming next week, it would make sense for some flipping will kick in. However, reversals have to start someplace, and one good positive day is nice to see.
I still am holding a very high level of cash, but I have a few trades going in names like Impac Mortgage (IMH) and SouFun (SFUN). I have my eye on a few other things, but I'm waiting to see how well the broad market holds later in the day.