Solid confirmation day

I view today as a solid confirmation day to last week's rally. The market put in a nice upside reversal on 8/29, then logged a strong accumulation day on Aug. 31. Today is the fourth day from that initial rally attempt, and right on cue the market gives us a solid confirmation day.

I think many are quick to dismiss today's action as not too significant. They cite things like moderate volume, short-term relief in oil prices, etc. But I think today could be more significant. Plenty of market leaders are breaking out strongly. Check out Apple (AAPL), Broadcom (BRCM), Quality Systems (QSII), Cerner (CERN), and Psychiatric Solutions (PSYS) just to name a few. Those are big moves.

Moreover, one of the things that caught my eye over the weekend was that the specialist short ratio was back down to 35-year lows (0.15), while the Rydex Ursa/Nova ratio was also back down to its yearly lows. So there are considerable short bets on this market, which could continue to put a bid underneath.

long BRCM, CERN, QSII, PSYS