Our oversold bounce continues, probably with some help from end-of-month window dressing. There isn't any news flow and that is probably helping to produce a little squeeze action.
We have better than 2-to-1 positive breadth with biotechnology, homebuilders and oil leading, while precious metals and solar energy lag. Solar has been a hot group recently but a poor report from First Solar (FSLR) appears to have killed that momentum.
LinkedIn (LNKD), Priceline (PCLN) and Google (GOOG) are leading the big-cap momentum names, while Netflix (NFLX), Facebook (FB) and Apple (AAPL) struggle. We are hitting intraday highs as I write and that is bringing in chasers who hate being left out.
I sold down most of my Direxion Daily Small Cap Bear 3X Shares (TZA) hedge yesterday, but I'll be looking to reload an inverse ETF at some point. I'm going to give this bounce a bit more room before I start looking at that play.
I have a few trades going, with the most interesting being Xinyuan Real Estate (XIN), a Chinese real estate developer that posted solid quarterly earnings of $0.47 this morning vs. $0.38 last year. It has a strong balance sheet and even pays a dividend. I'm building the position and looking for a move through recent highs.