This has been a fantastic bounce since the lows on December 24 but I'm finding it increasingly difficult to navigate. Many individual stocks have gone from grossly oversold to overbought and they are now running into resistance from back in mid-December.
On the other hand there still is a surprising amount of positive momentum and it is causing fear of missing out as well as a good old-fashioned short squeeze. Oversold conditions didn't matter much on the way down, overbought conditions aren't convenient timing measures either. I'm seeing some very sloppy speculative trading today in 'junk' names as traders start to panic they have missed out and that causes me a bit of concern as well.
It is important to recognize that opportunities in the market occur irregularly. There were some great potential trade setups a week or so ago but now the supply has dried up and we have to wait for the next supply to develop.
My game plan now is to make sure I don't give back recent gains and to be more defensive. If we have a pullback and some consolidation I expect some good stock picking. I expect to see the bears press some index trades to the downside very soon but no one called the recent bottom with much precision and I doubt anyone is going to do a very good job of calling a short term top now. If you trying to catch a turn make sure you are ready to be wrong for a while.