After four days of weak starts and strong finishes, it seems fitting that we gap up and fade. The action is very strong, with breadth running almost 5-to-1 positive and major sectors in the green, but we aren't gaining additional traction. The tendency is for all gains to come overnight, and I wouldn't be surprised to see that happen again.
If you have longs, there isn't much choice but to lock in profits where you have them. I sold down Jazz Pharmaceuticals (JAZZ), InvenSense (INVN), Spectrum Pharmaceuticals (SPPI) and VirnetX (VHC), all of which I've discussed lately.
One sector I'm looking at harder this morning is gold. I bottom-fished Golden Minerals Co. (AUMN), which has an interesting story that I'll discuss later. It is finally looking like it is turning back up, and I'm inching in.
I'm hunting for more long inventory but, as usual, this market is keeping the entry points very challenging. Chasing strength can work selectively, but it is very easy to be caught just as momentum falters, so you have to play things tight. It is much tougher than the indices would have you believe.