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Stock Pickers' Market Coming Off Oversold Reading for S&P 500

Stocks in this article: SPY GLD IWM

"Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it." -- Peter Lynch

NEW YORK (TheStreet) -- Today we had a strong start to the week, with several leading stocks really taking off. We are coming off oversold levels, so who know if this is a bounce or something more sustainable. Stocks are still mixed overall and this continues to be a bit of a tough year. 

The Russell 2000 (IWM), which has been the leading index, says it's just a bounce, but this bounce could be good for a few days. So I am in a few stocks that are looking and acting their best. I was also stopped out of a couple today after buying them today, with small losses.

From my view, we remain in a large bull market which began in 2012, and still has three to five years remaining. We can't rise all the time, since we need long periods of consolidation to keep the momentum going to the upside. We will have great strong moves up, similar to the late 1990s, but we are years away from that blowoff. That is great news.

We will have plenty of outsized gains before that blowoff move to the top begins. But we are still a few years from seeing that move begin. While it has been fun the past two years taking advantage of constant strength, perhaps 2014 will be known as the year of rest.

I know people want gains always but it just isn't realistic. Trust me. This slow choppy year thus far is exactly what we need to maintain the health of this bull market.

Gold (GLD) was smashed in overnight trading while I was sound asleep, as so often happens. I did warn in my weekend letter, and here last week, that miners were acting sloppy and to be careful. But I certainly didn't expect such a large drop in gold. Stings if you're in it, but I avoided it. Gold and the miners are so hard to trade, especially coming off a potential low.

Let's check the charts tonight.

The S&P 500 SPDR ETF (SPY) is coming off the 21-day average well, and a break of $198 should take us to the near inevitable resistance level at $200.

It doesn't look like this move will take us too far, so picking select stocks is key.

Enjoy your evening and Tuesday.

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