Market Reverses Early Losses, Frustrates Bears

My Stock of the Day is Global Sources (GSOL).

This company is an e-commerce company that facilitates trade with China. The company has solid fundamentals, and is growing at very fast rates. Earnings growth was 50% last quarter, and averaged +70% for the two prior quarters. The company is relatively small, with a market cap of $800 million.

A look at the chart shows that the stock has been contsructing a 3 1/2 month cup-and-handle pattern. Yesterday, it shot out of this basing pattern on a huge spike in volume. This breakout to new highs should be significant. And I expect the stock to continue to rally. What is more impressive is how the stock shook off the weakness in the Asian markets overnight.

The market overall put in another impressive session this morning. The bears' were salivating when they saw the news that China plunged -6.5% overnight. I am sure they thought we were in for another bout of selling like in late February.

But the market likes to frustrate the majority of investors, and it proceeded to shake off the early weakness and build throughout the day. The FOMC minutes provided an additional spark to the market, as it was perceived that Fed officials have become more upbeat about the economy.