The market is holding on to decent gains but the action has the feel of a limited oversold bounce rather than a major change in character.
Typically, when the market undergoes a transition we see a burst of action and great worry about being left behind. The action today doesn't have that feel and I suspect that is due partly to the impending jobs news and the upcoming election. It is a tough time to look for a major change in market direction with so many uncertainties.
As I discussed in my opening post, the key to the market is that it continues to hold the 1400 level of the S&P 500. The bounce today gives the bulls some breathing room, but if this gain starts to slip away and test this level, I'll be selling longs and putting on shorts.
My game plan continues to be to focus on quick short-term trades like Impact Mortgage (IMH) and SouFun (SFUN). I have no intention of holding positions for very long, but if I catch some momentum, which is rare lately, I'll let it ride.
It isn't a good environment to carry much inventory, but that doesn't mean you can't knock out a few trades. Just keep the right mindset and you can even make a little money while you wait for better conditions to develop.