There is mixed action Wednesday morning as the indices reverse recent action. The DJIA is giving back some recent gains while the Nasdaq 100 (QQQ) is managing a strong bounce of 1.6%.
Breadth is running slightly negative with around 3,500 gainers to 3,600 decliners and the list of new 12-month highs is very quiet with at 100 names.
What we are seeing is some reversals in the overreactions that have occurred in the last two days. This is just realignment as traders try to catch overbought and oversold moves. The bigger picture remains unchanged and suggests that there is more rotational action to come.
I've been focusing on some quicker trades this morning. One name I've been tracking for a while is Trillium Therapeutics (TRIL) . The chart has been developing well and there is hope that the company will update data when it announce earnings this week. The biotech will also be presenting at the ASH Medical Conference in early December, which may serve as a catalyst. The combination of the chart with some potential catalysts pushed me to add to my position.
I'm also looking at some stocks that I consider to be very cheap on a fundamental basis but lacking any immediate news to drive them higher. A good example is Pacific Ethanol (PEIX) . Rather than just buy and hold a position like this, I will look for some very short-term opportunities to trade for small gains. The fundamentals help to provide support so it helps to reduce risk.
I have a few other smaller trades in play but I don't view this market as conducive to aggressive moves right now. On the other hand, this sort of action is very healthy for chart development and should lead to great setups.
