Someone is Lying

A few market issues stand out into the morning's mild bounce from oversold conditions. First and foremost, the small cap stocks in the Russell 2000 Index and the small/mid-cap biotechnology stocks in the XBI ETF are lagging, once again. This is likely a function of a general "risk off" environment, with growth managers dialing back risk even into oversold bounces. 

In addition, volatility is not yet getting crushed, as we have grown accustomed to when equity snap back from sell-offs. Leveraged short volatility ETFs, such as SVXY, are up just over 2%, for example, even as the pre-market earnings names like DAL and MS are bouncing. Further, crude oil remains in the red, though buyers are trying to hold the USO ETF over $8.60 as we speak to play "catch-up" to stocks. 

Another interesting divergence is the gold miners getting pounded early on, with GDX and GDXJ both making fresh lows even as silver is green. Here, again, I suspect someone is lying and we should know who it is within short order.

Overall, the market bounce is still holding, as I write this, after sellers tried for an initial fade off the open. I am not immediately looking for new shorts, but am staying selecting with any longs, as well.

As the rest of the morning and midday portion of the session unfolds, I am looking to see if some of these spreads begin to tip their hands a bit more for short-term traders.