This is almost an exact set up I o-fund_25.html">opined about this weekend
The reason I think this *could* be a probability is many of the stocks I own at the top of the portfolio and have as "want to add" status are stalling. These have been the generals and when the market does throw in these intraday rallies the traders are jumping into beaten down financials and commodities.
In the short run I almost want to be leaning to the most beaten down "worst of" stocks, although my time frame (intermediate) does not position me in those type of stocks. But for 1-3 day "flipping" type of action I could see the potential for some snap back rallies in those groups instead of what we own.
And so today we have Barclay's (BCS) up 60%, Morgan Stanley (MS) continuing a great run, and HAL9000 and his friends are running into the dry ships = steel = fertilizer = oil = infrastructure = wheat = coffee = coal = it's all the same to HAL trade.
You also have some of the worst of groups i.e. casinos, some consumer discretionary and the like who have fallen so far away from any moving average rebounding. So far this is textbook - traders jumping into the beaten down stuff and most of the stronger names of late not doing much. Reversion to mean trades; hot money running from 1 group to the next. I'll keep repeating - any rally let by "worst of breed" is not one to get behind.
In a perfect world I'd like to see this market drift up to S&P 860 or so to throw in the next tranche of short exposure.
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