The upbeat action that started on Friday following a disclosure that Warren Buffett increased his Apple (AAPL) stake is continuing this morning but the sudden reversal in sentiment is a warning to signs to the contrarian bears. Nothing much has changed has changed in the market either fundamentally or technically, but the sudden desire for exposure to the high momentum technology names, that were anathema just a short while ago, is suspect.
The mood this morning is that the worst is over and that we have seen the lows. That may be possible if you think that the character of the market is similar to what it was in January, but I'm, literally, not buying it. I expect the worries about trade, inflation, the strong dollar and the technical patterns to pop again.
Of course when the action is positive, you have to try to take advantage. I'm seeing very good action in names like Baozun (BZUN) , Sailpoint (SAIL) , Endocyte (ECYT) , W&T Offshore (WTI) , 58.com (WUBA) , Turtle Beach (HEAR) and Sarepta (SRPT) .
One speculative small cap on my radar is Vivopwer International (VVPR) . This is the sort of speculative junk that cam make fast moves in the right market conditions.
The indices are off the early highs but breadth is running about 4200 gainers to 2500 decliners. New 12-month highs have hit over 200 to just 47 new 12-month lows.
I'm skeptical of how much further this market can run given the suddenly frothiness but we need to take advantage of the long opportunities while we can.