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Today's strong surge to the upside is a bit of a positive surprise and most definitely helps the bullish argument for equity investors. So much so that we're going to take our recent theme of fading the rallies with put option purchases off the table now and move to a more neutral wait and see approach with the major indexes. However, I think it's important to note we're not quite out of the woods yet but today's move is enough of a surprise to potentially avoid swimming against a potential reversal of currents.

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Hope your weekend was positively eventful. It appears we're off to another fairly volatile week for the major markets. No real news or material changes to speak of with any of our Featured Stocks. One of our newest ideas, DSCO, seems to be cooperating trading up nicely so far while our other newest idea, VRML, hasn't done much either way yet, but that can change on a dime.

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Good day all. Markets are playing a good old fashioned game of bull and bear today with the bulls getting the nod for winning the battle right now. I still wouldn't get too overly excited but today's mid-day move is most definitely something the long side of the market can build on. For now though, we're still going to stand pat that the short-term pops are nothing but an opportunity to position for a move lower.

What we have found very interesting over the last few weeks is the biotech sector has been quietly outperforming the rest of the market, so we went on the hunt for a few attractive biotechs and came up with two new ideas worth serious consideration. Usually, when a particular sector gets hot, it lifts the sentiment for just about everything in the space. And, when that space is biotech, it can often become an exciting ticket on Mr. Toad's Wild Ride.

We identified two small cap biotechs that are looking very attractive technically. Both are well capitalized, very deep in their R&D lifecycles and not too much debt to speak of. I'll give you a short overview of the companies here and a technical look at both since we'll be making them Featured Stocks at the close today should you choose to start digging deeper and learn more about either play.

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We mentioned in yesterday's edition the major indexes were due to snap back over the next couple of days and sure enough Apple (AAPL) provided tech investors with something to cheer about this morning. However, I wouldn't be so naïve to think that it was Apple's results that was solely responsible for today's pop. The markets on a short-term basis were grossly oversold, so Apple's numbers were very timely to provide at least a short-term relief rally that will likely set the stage for the market's next big move.

What makes today's pop a little more interesting than your normal snap back in a down market is the size of the gap that likely caught amateur short-sellers on the wrong side this morning. Lesson here... if you're going to short something, do it on a snap back rally not at its lowest point. This is why we open put option positions on a rally rather than on a low, so if you stick with our recent theme, now would be the time to take a shot at some index put options, while the market is a little exuberant.

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Good Tuesday to you. Our stance on the major markets isn't changing quite yet. We still believe the markets have a ways to go before we're going to jump up and scream rally. For now, we'll stick with our short-term trading theme of fading the rallies with index put options and closing them out on the move lower. It's been working quite well and sometimes boring is good.

With that being said, I wouldn't be surprise at all again to see a short-term snap back into the close or over the next couple of days to position us for another opportunity to scalp some short-term profits.

Although the major indexes have been struggling, there have been some very nice moves of late in the small cap space that have yielded us some excellent returns if you've been following along. Just because the rest of the market has been out of favor, don't think for one second that if you're in the right stock that there isn't some enormous upside returns to be had.