Mixed Signals

Market indicators are mixed at this point. Based upon my analysis, both downside and upside appear limited in the short run. Given this, the wildcard of the non-farm payrolls tomorrow and the fact that the market still has room to have another day like today to the upside before becoming ST overbought, I closed out my XLE put hedge today. It would have been better to have done so yesterday but I'm not going to lament on that. Still came out with a profit though. It's gotta be pretty disappointing if you've been a bear. They had the ball for 3 weeks now and they've managed to accomplish pretty much diddly squat and now it could be that the bulls have the ball for a week or 2, although as I've said, I don't think upside potential is great in the ST and so if we get ST overbought again I'd probably put back on the hedge.

Meanwhile, hwo has had quite a dip to 2.19 after making a run as high at 2.69 (although not much shares changed hands at 2.69...the true high was more like 2.55). Well, I knew such a dip was possible after the torrid run it has had but I have no regrets not selling shares near the recent highs given where I believe the stock should fundamentally go to. There were no red flags from a pure trader/speculator perspective either, specifically, there was no "blowoff top" type behavior as the price spike was not accompanied by massive volume which would indicate possible buyer exhaustion. When it comes to microcap/small cap stocks, they tend to exhibit this pump-and-dump-like signature at major tops.

A few weeks back I said I wouldn't add to long exposure unless I  found a very compelling opportunity....well, I believe I have found one and I have started accumulating shares. This stock is the most grossly undervalued stock I have ever come across! More on this in the next post....