This column was originally published on RealMoney on June 9 at 1:30 p.m. EDT. It's being republished as a bonus for readers.

Did Thursday make a big difference in your mind-set? Were you a growling bear before, but now find yourself snorting and stamping your hooves?

It is conceivable that Thursday's intraday reversal could turn into something lasting and significant. But it's important to remember the three sucker's rallies we've suffered through over the past month or so. Certainly there was something different about Thursday's action. The intraday reversal was dramatic, and volume was heavy.

Still, I'm playing it close to the vest, because I think there is still a lot of confusion out there. I understand the idea that bull markets climb a wall of worry, but I'm not really seeing much evidence of a wall here. According to Jason Goepfert at, mutual funds have a very low amount of cash as a percentage of total assets. They're all pretty much invested, leaving less firepower on the sidelines than you might think. I've discussed the dynamic of cash levels relative to equity levels before.

Everyone makes their own decisions about how they approach the market. Some look at it as a series of wind sprints. They'll try to be the first ones out of the blocks and catch as much of each move as they can. They want to trade the ebb and the flow.

These are the people who have taken it on the chin lately and have helped perpetuate the grind.

Do you fall into this camp? Just a few days ago, were you a "sell on rallies" bear, only to morph into a "the selling is done, let's party" bull? If you've switched sides that easily, then you have a very short-term view of the market.

Others might be waiting for more evidence that any anticipated bounce actually has legs. They remain suspicious of the bounce and stick to the "sell on rallies" theme, until the data convinces them otherwise. That type of approach is a bit easier for me to adopt.

As most of my readers know, I advocate diligent use of stops. This discipline serves as a personal trend-strength indicator to me. If I find myself getting stopped out of an inordinate number of trades, I interpret that as a sign that the prevailing trend is changing.

A side benefit is that my cash-to-equity ratio grows -- I automatically move into cash. That's pretty much where I am now. I'm watching the market with a suspicious eye and may become more interested next week.

Let's look at some charts.

Despite the lower close, the reversal in the Nasdaq 100 looked pretty clean to me. The close was higher than the open and very near the top of the intraday range. This action really defines the key levels. The obvious one is Thursday's intraday low. I just would not be long if that level is breached.

But assuming the NDX moves at all higher today, I'd be suspicious of the reversal if the support line drawn above is breached. After all, bulls are interpreting Thursday's long tail as evidence that the weak hands have been flushed out, right? So the only way Thursday's open can be breached is if there were more weak hands than anticipated. This pretty much defines my current approach.

This daily chart of Websense ( WBSN) was interesting to me because the indicators are starting to show some subtle positive divergences. The chart resembles a waterslide. But RSI is finally moving decisively above the oversold level of 30. At the same time, the money-flow index (similar to RSI, only with a volume component) has been moving higher since early April. That equates to a credible argument for a bottom in Websense. I think the stock presents a low-risk entry now because of the proximity of the stop to the purchase price.

Comtech Telecom ( CMTL) announced solid earnings Thursday, and the bulls never looked back. Notice how it has been advancing over the past few weeks in direct opposition to the broader market. That's a sign of real buying interest.

I've highlighted the volume spikes from two days where the intraday range was much higher than normal and where the close was close to the intraday high. I've seen this type of follow-through before in the early stages of solid uptrends. I'd be a scale-in buyer now, and I'd hope for a pullback to around $30 so I could buy more.

LoJack ( LOJN) has just put in a higher low on its daily chart. I've connected the two lows with a trend line. I'd use that as a reference for my stop-loss. If the stock falls back to the low $16s, we might be a bit early. But the relatively short price-by-volume bars between $18 and $22 provide a bit of headroom for the bulls.

I've written about XM Satellite Radio ( XMSR) a few times, including in the Short Advisor back in December.

I hear from a lot of people who remain painfully loyal to this company, despite its lack of earnings. I honestly don't see the attraction. The last failed rally indicated the ongoing presence of aggressive sellers. If you're still holding this stock, you may be using hope and revenge as dual trading strategies. You hope the stock moves higher, and you want revenge on all those sellers who wrongfully knocked the price down.

Me? I'd rather plug my iPod into my ashtray and keep the subscription fee.

Be careful out there.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider LoJack to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

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Fitzpatrick is a freelance writer and trading consultant who trades for his own account in Encinitas, Calif. He is a former co-manager of a hedge fund and teaches seminars on technical analysis, options trading and asset-protection strategies for traders and business owners. Fitzpatrick graduated from the McGeorge School of Law and was a fellow at the Pacific Legal Foundation, a nonprofit public interest firm specializing in constitutional law. He also practiced law in the private sector before pursuing trading as a full-time career. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Fitzpatrick cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.