An Eerie Calm

 | Feb 19, 2013 | 8:30 AM EST
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I wanted change and excitement and to shoot off in all directions myself, like the colored arrows from a Fourth of July rocket. --Sylvia Plath

The stock market always finds new ways to surprise us, but the recent action has been particularly unusual. It is trending upward and hitting new highs, but there is little excitement, and even the press is commenting about how eerily calm and slow the action has been. Markets that act this well should see more energy, but this one seems to generate confusion and uncertainty.

I can't recall ever experiencing such slow action as indices close in on new multiyear highs, and I suspect the lack of euphoria and bullishness helps to keep it going. There is a big supply of non-believers and the longer the market holds up and refuses to break, the more frustrated they become and more likely to buy just to have some market exposure.

I've been insistent lately that we need to stay bullish and stick with this trend until there is good reason not to. The alternative is to keep predicting that we are going to roll over, but the folks who have taken that view have been wrong for many weeks and are paying a high price for it.

It is very easy to understand the temptation to call a market top when things are this slow. Most everyone would prefer a little more drama and a quick reversal would certainly provide that, but the more we look for a turn, the more we seem to keep plodding steadily higher.

Even if you keep a bullish posture, this market has not been easy. It lacks the strong pockets of momentum that you usually see when hitting the highs. There is a big supply of stocks that are making new 12-month highs, but without the wild momentum usually associated with markets at this stage.

It is particularly puzzling that traders have not created more hot action in this market. In the past when the market was at this stage, we would have great excitement over a number of key stocks flying higher as the chasers piled in. There are stocks that are moving up, but there appears to be great distrust and less worry about missing out.

I can on go at great length about how peculiar this market action has been, but our job is to find a way to deal with it and make some money. All we can do is stick with the trend and keep looking for stocks to ride. You aren't going to do well if you keep talking about tops and turns. We have to stick with this price action as long as we can. Right now, it continues to be positive.

I would love to see this market roll over a bit and shake things up, but that isn't happening and we have to trade what we are given. Even though it's slow and peculiar, it is a bull market and we need to accept that until something changes.

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