VirnetX Holding Corp. (VHC)

Case in point: VirnetX.

The company is going to have to win additional cases to continue to justify the current valuation. By Tim Collins VirnetX Holding (VHC) has lived by the patent sword and died by the patent sword. The company just validated patents in the case agains...

I am also looking for some trades, but I want to stay selective and avoid being trapped when volume dries up.

The downtrend isn't over yet, so you might as well knock out some trades in the short term.

As we await the FOMC's interest rate decision, most of the market positioning has already been done.

Will more economic bad news prompt the Fed to roll out QE3 soon?

I'm not seeing much momentum today.

The action is strong, but the market isn't gaining additional traction.

Takeover news has the sector buzzing this morning.

As long as you don't expect much other than random, low-volume action, you'll be fine.

Shrewd traders know that chance is a big part of trading -- but success comes from thoughtful management thereof.

This is whippy and uncertain market for stock-pickers.

The mood is upbeat and breadth is perky, but volume is painfully light.

Can buyers build some confidence in the market and turn it back upward?

When we don't have high levels of fear and greed we tend to move in random fashion.

Until the news headlines have less of an impact, individual stock picking won't matter much.

All it will take for the market to roll over very fast is for Greece to say it was just kidding.

So far, the selloff looks like just a reaction to the market's overbought condition.

Put some money to work, but keep your stops tight.  

I want the bulls to demonstrate that they have a little staying power. We have some reflexive dip-buying on the weak open and a little bit of a short squeeze to help matters. The news didn't suddenly improve; we just had a little too much negativity and that set us up for a bounce. The question now is whether the buyers have enough juice to keep on pushing. As long as we stay above the early low of $114.44 on the SPDR S&P 500 (SPY), I'll be looking for traders to maintain a long bias. We are oversold enough to make shorts dangerous and to support some upside in stocks that have been hit hard lately. The most important thing is that you treat the action simply as a bounce and nothing more at this point. It could develop into a turning point, but it is premature to jump to that conclusion. Right now the bears are suddenly out of position, and that is helping to give us some upside momentum. I'm doing a little buying. My biggest new buy is fertilizer play CVR Partners (UAN). The sector has shown some relative strength lately, and I like the early volume and the move toward all-time highs. VirnetX (VHC), which I've mentioned a number times as my sympathy play on the InterDigital (IDCC) auction, is attracting some attention and I added a little there. I have my eye on a few other things, but I want to see how this market acts on a pullback first. This feels like a very routine Monday-morning bounce, and I want the bulls to demonstrate that they have a little staying power. Long UAN and VHC but positions will change at any time.     UAN VHC IDCC

If we take what the market gives us, though, it can add up nicely.

The only group that's bouncing is precious metals. Otherwise, I'm looking for beaten-down bargains.

Doing small trades with short time frames.

Although the short side has been challenging, it makes more sense to lean that way.

Market players were too bearish last week and were not prepared for this upside.

The fact that it might not seem very logical is exactly what can keep it going.