Buyers Are in the Driver's Seat

 | Feb 13, 2013 | 8:17 AM EST
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Success is due less to ability than to zeal. --Charles Buxton

The only thing you need to know about this market since the first of the year is that buyers still want in. News, fundamentals, technicals and pretty much everything else has been irrelevant. The buyers have been in the driver's seat and they just keep on pressing.

In this sort of market my advice to stay with the trend and avoid calling market tops has worked well, but it isn't as easy as it sounds. There has been quite a bit of choppy action lately and it is easy to find yourself in the wrong individual stocks if you aren't careful. Plenty of stocks are hitting new highs but the leadership is narrow and strength has been muted lately.

Yesterday I was particularly disappointed with the number of intraday reversals on my screens. The early spikes invited more profit-taking than chasing and that was quite costly if you didn't do a little selling at the right time.

The dilemma is that there is still nothing really wrong with the market action. There is no major change in market character, although there are some niggling negatives. It would be very easy to be more anticipatory about a market turn, however, that has not been a smart thing to do for a long time.

My biggest problem is that I prefer the market pull back and shake things up a bit, rather than continue this slow drift upward. I'm finding it increasingly difficult to keep money at work and that is going to be the case until there's some sort of shakeup.

Yesterday's intraday spike to highs felt very computer driven, and I suspect the computers are all programmed to focus on squeeze-type action since there are so many people looking for at least a minor pullback. Even the bulls would like to see a little downside now and then to allow for better entries.

The easiest thing in the world to do is to keep trying to predict a top. It is very tempting, but until there is hard proof of some sort of change in the market character, it is just wishful thinking.

Keep looking for setups and keep plugging away. Let the attention-seeking pundits make the big dramatic calls while we focus on making money while we can.

The president's State of the Union address doesn't seem to have had much market impact and there's a slightly positive start, with some help from strength in Europe. There are no major economic reports today, but there are still quite a few earnings report, with Cisco (CSCO) of interest tonight.

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