Oversold bounce action is kicking in led by Google (GOOG), which some view as the best sympathy play on the Facebook (FB) IPO. Breadth is quite good as it approaches 3 to 1 positive, and you can see how the gloomy trading of the last few days has caused some scrambling for long exposure.
The biggest danger is news out of Europe, but with the Greek election a month off and growing acceptance of the possibility that they may leave the European Union, the bad news may already be discounted to some degree.
Another problem is this recent market breakdown has created quite a few "stuckholders" who will be happy to escape some painful positions into strength. The possibility that could set off another V-shaped bounce seems remote without the assistance of the Fed and further quantitative easing. We may actually have to deal with a market driven by human emotion, rather than a flood of liquidity.
I'm trying to play this bounce and have taken trades in a few things, such as LinkedIn (LNKD), which I believe will have some Facebook sympathy. I also like how biotechnology has been holding up lately, and I added VIVUS (VVUS) and Amarin (AMRN), which are among the better charts that I see.
I'm definitely a renter rather than a buyer, and I'll be keeping very tight reigns on all positions. However, the market is due for a little relief action and we might as well take advantage. Just don't be too fast to start thinking it's made a major low.