It probably helped this morning that the market gapped down aggressively since mildly positive opens have been sold recently. Traders are always more likely to move counter to the opening print and a good-sized gap down was a signal to buy for a bounce.
Unsurprisingly, the bulls are pushing much harder for a bounce today. The market has been oversold for a while but the patterns have favored fading of early strength, which has kept the bounce buyers at bay. They finally have a chance to gain a little traction and they even have the mighty Apple (AAPL) in the green for a change.
The important thing to keep in mind is that it's a bounce and not a bottom. Don't be too trusting too fast. If we hold up and build some support then we can be more optimistic but at this stage there is no reason at all to believe that we have seen the lows.
I continue to have very limited long exposure. I have some Sarepta Therapeutics (SRPT), which I mentioned yesterday, Nam Tai Electronics (NTE), a Chinese contract manufacturer, which made a nice move on earnings and is setting up again, and some AAPL for day-trading action. I have my eyes open for other opportunities but don't see anything I'm willing to chase yet.
The easiest mistake to make now is to be too bullish too fast. This market still has plenty of work to do before it will earn our trust.