The overanxious bears, who expected some profit-taking to kick in, are being squeezed in the early going. Once again, I suspect that this is a function of too many market players being poorly positioned and worried about racking up some relative performance before the end of the year. They are more worried about the market running away without them than they are about being caught in a pullback.
The action is obviously much more mixed than yesterday but there is still plenty of interest. The biggest negative is weakness in banks but strength in retail and oils are picking up the slack.
I'm working on some smaller trades primarily in the oil group but I'm still staying short term and doing very little as far as building bigger positions. A few of the oils that I'm looking at this morning include Colfax (CFX), Magnum Hunter Resources (MHR) and Flotek (FTK). Approach Resources (AREX), which I mentioned on Tuesday, is still moving and I have sold that position down.
CFX is a good example of the sort of chart I like. It has had excellent relative strength during the recent market weakness and is now starting to poke its head back up. The stock needs to move through $30 on better volume to attract the momentum money that chased this one up a few weeks ago.
I don't want to be too comfortable with longs right now as the need for some consolidation is obvious. But this early action is a good sign, as it indicates that there may be some pretty good support.