After the last four multiple-day pullbacks in October, November and December of last year and March this year, the smart move was to buy immediately when we reversed and gapped up. In each case, the bounces quickly gained strength and there were no further pullbacks of consequence for a while.
Technically, you'd normally expect some back-and-forth action after a big pullback as the bulls and bears battle, but for whatever reason that just hasn't happened. You simply buy the bounce and ride it. Maybe it is high-frequency trading that creates that tendency, but it is a clear pattern.
So far today we have gapped up and stayed flat. Many of the early bounces seem tentative, but they aren't fading too fast either. Typically, the longer we stay positive, the more confidence will build and the buying will pick up. If we take out the early highs and the S&P 500 moves through resistance at 1373, which is the 50-day simple moving average, the likelihood is that some short covering will take place and bulls will start to chase a bit more as they look for long exposure.
I'm moving very slowly so far with new buys. I have a shopping list of names but so far volume is light and there doesn't seem to be much buying interest in what I'm tracking. The longer the market holds up, the more likely I am to start inching in, but I'm biding my time for now.