In the last two weeks, the stock market has transitioned from a steep decline to a situation of two-sided, volatile trading. There are clearly buyers interested at this level. However, up until now, the sellers have retained the upper hand, perhaps due to a prevailing sense of fear and insecurity, or maybe due to forced selling. In the premarket this morning, we have a likely gap higher on the heels of a big day in overseas markets. Looking at the SPY chart, we can see that price is sitting at the prior low. If we can rally off of this level on high volume, we have a good chance for a sustained move higher.



I am still in day-trading mode, and nearly all in cash overnight. At the same time, when asked by friends and family, I have been supportive of getting back into the market on a small scale. As I have mentioned previously, my initial focus is on commodities and energy. OIH is also sitting at the lows. With BP reporting a strong quarter, we could get a big move from the O&G sector.



Yesterday I started some small positions in PDO and APWR. In both cases, current price is a fraction of the yearly highs, despite the fact that these are profitable, growing companies. Of course, it remains to be seen whether the growth and profitability will be maintained under current circumstances. At the same time, both are very oversold, and will attract attention if oil and energy rally. Since I have kept my position size relatively small on these whippy stocks, I will give them room to move, and will look to add on evidence of accumulation.

- PDO closed yesterday at 3.93, down from a 52-week high of 36.80.