Too much to handle...

Some may call the most recent rally as a massive short covering that will not last.    Well, today those participants got what they wished for, a fizzling follow through, especially late in the day.    Ok, if this is all what it seems, then much of the action in the future can be anticipated, right?   Not so fast!    Regardless how you interpret Monday's action, it was basically due after days of relentless selling.    You don't think this market won't put up a fight and just let it slide 30% straight?    In this day and age, longs still dominate the shorts and bulls dominate the bears.    Most of us are raised to buy stocks, and most of us had to learn the hard way to know how to sell stocks.    It was just an oversold situation that was being taken advantage of and that's the end of that for now.    So where are we now?   We can either retest the lows or trend sideways for a bit.    After a big sell off like we just did, the best case of scenario is always trending sideways, in order to find a true bottom.    It's true that we may still go lower but until that day comes, we'll assume otherwise.

We had a couple of pre-earnings run ups today.    The strength in EJ STV LFT looked particularly good but we have to understand that they are all due for an earnings release.    EJ and STV are releasing on 15th, while many other Chinese co. are releasing on 19th and 20th.   So keep an eye on those releasing before and after the reports.

QSC, it sure feels nervous trading this thing the last couple of days.    After all, it was merely 40 cents three months ago and around a buck three days ago and even up another 50% from our alert late Tuesday.  This one had a tremendous run so far and odds definitely favours a pullback at this point.     This one may have a much higher valuation down the road but at this instant, it needs a pullback.    We cashed out most of our holdings today and will watch how far this one pulls back to in order to find a possible re-entry point if warranted.

PSEM, this one in our opinion is near the end of a setup and something is about to happen.   9 ema has caught up to the recent rise and the next move will determine where this one wants to go.     We have a strong likings to this one but as it's proven to us many times before, seeing is believing and this could use a little help from the tech sector.    No matter how strong we feel about a stock, the stock has to act accordingly to our feeling.    We are eyeing this one closely and waiting for a move.

MELI, reported accelerating revenue and slightly beat the estimates. This one moves fast when it wants to and did at the open before settling down the rest of day. Considering it didn't slide further while most did late, we'd keep a close eye on it here. Also, because it might get a positive spin from a firm covering it as it did last report that pushed it higher. NCH is not far here. CDS , the possibility a firm covering it will put out a positive spin is here also as last Q after earnings. Considering the reaction was muted to their report, we'd look for another angle here such as that to get it going.

The bottom line, if you must trade, trade small, trade those that had good earning recently, and most importantly, trade those that have strong technical setups.    We aren't out of the woods yet in terms of dealing with extreme volatility.    We have to be prepared that the market can swing triple digit point either way on any given day.    This can be a very stressful market if you trade actively.   In our opinion, it's best to go light and pick your play selection carefully.