The flippers hit the open hard, but the dip-buyers stepped up and squeezed the bears once again. As I've been discussing, the nature of this market is V-shaped bounces, and that is exactly what we are seeing. In fact, we are hitting new highs for the day as I write.
The key lesson is that it is extremely dangerous to short into this sort of action. While the technical and fundamental arguments may look good, the pattern is that we run straight up and crush the bears along the way.
Simply not shorting is definitely helpful in dealing with this market, but to really profit, you have to get some money to work in the right spots, and that is the big challenge. I am constantly digging for stocks that are moving on heavier volume out of a good foundation. I mentioned Yandex (YNDX) and InvenSense (INVN) earlier, and I'm playing a few others, such as Mitek Systems (MITK).
One chart of particular interest that I'm watching right now is Affymax (AFFY), a small biotech, The stock has been trading between $10 and $11 for about a month and is turning up to test the $11 resistance level today on decent volume. It isn't extended, and it should attract breakout buyers if it can clear some persistent sellers.
That is how I'm trying to put money to work. My only complaint is that I can't find more charts like these.
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