Going with the Flow

While it may very well seem like there is no rhyme or reason to this price action of late, buyers sure did not waver from what could have been a very bloody morning off a downside reversal in the futures overnight.

Instead of a bloodbath, however, we are now seeing plenty of squeezes to upside, especially in beaten-down junk like CREE FIT MBLY SHAK TASR YELP, which may be masked by the GPRO gap down. 

Still, shorts are a bit panicky this morning, and the lagging financials and biotechs catching a bid is not helping their cause. 

The energy/materials/emerging complex is also rallying on the back of a weaker Dollar/stronger Euro combination, as the market tips its hand further about those correlation. And this is all happening as leaders like FB GOOGL suddenly lag. 

For now, we are carefully playing day-trades and very selected trades overnight, fully aware of the violently indecisive overall market conditions. It is critical to not get caught leaning too heavily-short at the wrong time, even if bounces have largely been sold into of late. 

Two relative strength charts to keep on watch here if the market sustains a rally into the jobs number morning are FSLR and KANG, both with rising daily chart moving averages below price.