Traders Looking for Action

It's a flipper's market, and some small-caps and mortgage plays are on the move.

We have some early pressure, but traders are itching for action and trying to push a few things. Apple (AAPL) and Facebook (FB) are probably the best examples of where the hot money is going, but some of the smaller-cap names like Sarepta Therapeutics (SRPT) are doing well also.

As I discussed in my opening post, we are extended and in need of some consolidation at this point. Of course, after a good week, the bulls want more, so they are providing some underlying bids, but if we take out the early lows, they will likely step aside.

I view this as a market for flipping rather than building positions, so I'm taking gains pretty aggressively when I have them. Mortgage plays Impac Mortgage Holdings (IMH) and Security National Financial (SNFCA) are active again. Perion Network (PERI), which I mentioned a few times last week, continues to chug along.

My stock of the week is Nam Tai Electronics (NTE), and that is acting well so far. This is a Chinese contract manufacturer that is rumored to have increased business from Apple. It expanded its facilities substantially and had a great third-quarter report. There is no analyst coverage, so it's a bit under the radar, but technically it is acting quite well.

I sold my ProShares UltraShort S&P 500 (SDS) position into the open but will consider remounting it if we take out the lows. We are right in the middle of the intraday trading range, and we'll see which way we break from here. Right now, I'm inclined to look for the early lows to be breached.

At the time of publication, DePorre was long NTE, SRPT, IMH, SNFCA and PERI, but positions will change at any time.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider IMH, PERI and SNFCA to be small-cap stocks.  You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.