“When you want to test the depths of a stream, don't use both feet.” – Chinese proverb

NEW YORK (TheStreet) -- A great quote for this market that is still suspect.

Small positions and tight stops are the equivalent of testing the market with one foot, and that remains my strategy as we continue to chop around a bit until the fall.

That said, I’m seeing many leading stocks do just that -- lead. While markets are still nothing to write home about, I’m seeing leading stocks act much better and many are now breaking out or are very close to doing so.

I’m still using relatively small positions to really gauge the market. So far so good.

One of the trades was a morning buy in InterMune (ITMN), which saw a takeover bid later in the day.  Sometimes you just get lucky and there is nothing wrong with that. It was pure luck, although the chart looked great and that is the real reason I bought it.

Courtesy of StockCharts.com

I am long SPDR S&P 500 ETF Trust (SPY) as well, using calls. We could easily push to 198 quickly so let’s see how that goes.

Enjoy this wonderful summer evening.

Warren Bevan

At the time of publication, the author was long SPY and ITMN, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.