The market gapped up higher this morning, despite notable weakness in many of the high growth names found in the Nasdaq Composite Index. As a result, the Dow Jones Industrial Average at one point this morning was screaming higher up 100 points, while the Nasdaq has been more or less flat, and is in the red at the time of this writing.

Looking underneath the surface, we have some small caps making nice intraday moves. At the same time, the very narrow pockets of momentum make it difficult to get very aggressive on the long side, as momentum leaders like BIDU CMG CRM NFLX are all firmly in the red. Just because there are not a bevy of attractive longs, though, does not necessarily mean it is correct to start looking for shorts just yet. As I discussed over the weekend, we could easily be experiencing another one of those low volume “V-shaped” squeezes to new highs.

Hence, a much more selective than usual approach is still advised. A neutral/cautious stance is not the most fun way to trade, but when the market is offering up unfavorable risk/reward setups, I am content to focus on protecting capital above all else. I am playing a few longs, but you can be sure that if we see a failed bounce I’ll be quick to hit the exits.

We’ve had our morning bounce after three days of selling, culminating with the bulls stepping in towards the end of yesterday’s session. I am quite content to have closed out my bearish bets this morning for wins, especially after locking in most of SMN for a 10%+ win yesterday. As soon as we bounced this morning and we did not fade after the first hour, you could sense the exuberance by many looking to ride the new wave of bullish momentum.

However, there remains quite a bit of technical damage out there to many key charts, namely AAPL FCX IYT. While today’s bounce is not a surprise to me, as I have been indicating in my recent videos, I am not convinced that the coast is clear. I prefer to reserve my real aggressive trading for markets that have a bit more continuity, rather than riding the emotional roller coaster of one day being down big on a name, the next being up huge, and down again, as we often see in unhealthy markets.

Remember, while aggression is often thrilling, it is selective aggression that gets the money over the long run. Trying to hit a home run on every trade and making sensational future market calls amounts to more style than substance. To think of trading as a glamorous profession can be just as damaging to your emotional well-being as it can be to your portfolio balance.

Headed into the weekend, my preference is to wait for the market to prove itself next week, especially with so many sloppy charts out there. An oversold bounce does not equal a high probability swing trade, as they can quickly fizzle out when met with overhead supply (trapped longs who are now close to even and want to hit the exits).