So far we have seen only minor selling into this gap-up open, which is an indication that market players are poorly positioned and trying to add long exposure. The dip buyers are afraid there won't be a dip, so instead they chase.
Breadth is outrageously positive, especially on the NYSE, where there are 2736 gainers to just 134 decliners. All major sectors are up with oil, gold, retail and banks leading the charge.
Homes sales numbers are out and are a little soft, which is slowing things down, but underlying support looks very strong and I would be in no rush to try to fade it. If you are looking to short, the point to do it is after we take out the opening lows, but there are no signs of that.
I believe we can run a bit because of poor positioning, the need for relative performance and positive seasonality. Throw in the inclination toward V-ish moves and I'm going to be looking for long entries.
The really tough thing for technical traders is that the charts are downright horrible. You have a bunch of oversold bounces and no real setups. That is always what happens at the lows, but it doesn't make it easier to jump in aggressively. I have a few small trades and it is nice to see recoveries in stocks I've mentioned lately, like Kodiak Oil & Gas (KOG), C&J Energy Services (CJES), Web.com Group (WWWW) and Flotek (FTK), but so far I'm not doing any aggressive buying.