How I m Playing the Bounce and Bottom Fishing The most oversold stocks are seeing the best bounces.
After aggressive selling on Wednesday, we have some bounce action Thursday morning. Breadth is running about 4 to 1 positive but what is most notable is that the most oversold stocks are seeing the best bounces. The Russell 2000 ETF ( (IWM) ETF) is up over 2% while the DJIA is up around 1.4%.
The biggest challenge for traders recently has been trying to navigate a rotational correction that was hitting various areas of the market at different times. The selling was more correlated on Wednesday and that may have been what was needed to help put in some support for stocks that have been suffering from relative weakness.