Dead Cat Or Buying Opportunity?

Good morning. Following yesterday's drop, buyers seem to be poking their heads out looking for situations to put money to work.

Good reports from BA, CL, and AMZN certainly have helped early sentiment though a number of economic reports due out today will have a substantial effect on trading. At 10:AM we have the release of the Existing Home Sales report (economists are looking for a 5.85 million pace), the first important economic report of the week. After that the EIA Petroleum Status Report at 10:30 and the Beige Book at 2:PM. In short, a very busy day ahead with plenty to offer.

The positive mood certainly is being reflected by the sheer amount of upside movers in premarket trading. Some of the more significant movers include AMZN, EGLE, GGBM, ALXN, ALGN, CKSW, PRAI, ANAD, NOV, ILMN, SNWL, WZEN, RFMD, CALM, LIFC, MVIS, DRYS, FTK, ACH, GPRO, PMTC, LLTC, GENZ, CHINA, NILE, SLAB, SNCR, BIDU, ASML, FORM, TASR, and AAPL. Meanwhile, this morning's losers are GPCB, HOKU, SPPI, NTRI, JOYG, PNRA, VOLV, FLML, BPHX, IDEV, WVCM, LOGI, and GLBL.

The reaction to earnings this week has been disappointing and many traders will be watching the strength of this bounce to gauge whether we're just seeing just a dead cat-like oversold bounce. Again, we need a series of rally failures for sentiment to change from the "we must buy every dip" kind of mood so the last thing you want to see if you're long and strong is a strong morning followed by another round of selling on higher volume. Have a good day!