Once again, many market players appear to be poorly positioned for further upside at the outset of trading. The computerized and high-frequency traders have done a great job exploiting that condition lately, and they are working hard at it today.
Fading the gap-up open is the standard contrarian strategy this morning and now that we aren't rolling over, the bears are covering and the bulls are scrambling to find long inventory.
I'm definitely not fighting the strength, but I sure don't have enough long exposure. Breadth is very strong at about 4300 gainers to just 700 decliners, and we all major sectors are up. Oil and gold are leading, as weakness in the dollar is the driving force.
I've added a few names this morning such as Merge Healthcare (MRGE), Web.com Group (WWWW) and Mitek Systems (MITK), which I've discussed recently, but this market still lacks momentum and leadership. It's just a lot of folks who are afraid of being left behind as the market acts in a manner that feels irrational.