Early weakness following a late bounce yesterday is looking like a good long-side setup this morning. The dip this morning was sufficient to clear more of the negativity and create positive anticipation into the likely news announcement about fiscal stimulus.
The biggest positive I see in the price action is that small caps are finally seeing some bottom fishing. The Russell 2000 ETF (IWM) held at yesterday's lows and I'm seeing sectors like biotechnology (LABU) showing relative strength.
I believe this is just bounce action at this point and not a bottom but I'm playing it and have added a number of buys. I've taken (SPXU) ETF short for long exposure and I've added a few biotechnology names like Aurinia Pharmaceuticals (AUPH) , which is one of my top picks for the year. Ocular Therapeutix (OCUL) , which had a very large institutional buyer, is also on my radar.
I've discussed building Disney (DIS) as a longer term play I'd like to build. I added to my tracking position today and still have substantial room to add more. I'm also starting The Trade Desk (TTD) as a longer term play and will be looking for additional entries as it develops.
This is bounce action and I am treating it that way and will harvest gains quickly. This is a bear market and it is not going to end today but the trading is likely to improve as the volatility finally slows down.
(Disney is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells DIS? Learn more now.)
