The action is rather chaotic so far this morning. There are data issues at Nanex affecting various quote services, which is adding an extra element of confusion, but weak ISM data is the major problem this morning. We have the weakest reading in that data since July 2009, which I'm sure is of particular interest to the conspiracy theorists who questioned the pre-election reports.
Monday morning gaps are always difficult to trust to begin with but it is more difficult than usual when the main market driving force continues to be political negotiations and macroeconomic concerns. Stock pickers are at the mercy of the headlines and that keeps the action choppy.
I'm trying to ignore the news flow and stay focused on grinding out smaller trades. There is too much instability in the indices to load positions and hope that momentum carries us. So to stay active I focus on very short-term trades and try to book quick gains.
A couple positions I've mentioned lately, Nam Tai Electronics (NTE) and Walter Investment Management (WAC), are acting well but I'm having the most luck trading lower-priced stocks like Cleantech (CLNT). Traders make some of this action self-perpetuating because they are anxious to be doing something, but as long as you stay disciplined it doesn't matter why something is moving.
I don't trust the overall market much but I'm going to keep digging for individual trades. Until the news flow shifts, there isn't much else we can do.