Relentless Stock Market Is So Good Even I'm Nervous

 | Jan 11, 2018 | 4:48 PM EST
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The word that comes to mind after watching the market today is "relentless." After the brief stumble Thursday, the buyers were loaded for bears today. It was straight-up action with acceleration into the close. Breadth was a very hefty 5,300 advancers to only 1,550 decliners. New 12-month highs exceeded 1,100. There was strength across the board.

If you are looking for negatives, about the only thing you can say is that the price action is too good. The indices are extended and many stocks are as well but when momentum is this strong overbought conditions can be overcome fast. All it took was a small rest yesterday for the bulls to regain their mojo.

I have to admit that the action is so good it is making a bit nervous. This obviously is not sustainable action but there is just no way to guess how much longer it may last. I found quite a few setups today that still look quite good. Some of the speculative junk has cooled off but there is rotation taking place and new merchandise is stepping up.

My mantra recently has been "stay focused on individual positions." When they start acting poorly that will be the signal to sell them and raise cash. This market is acting like a runaway train right now and it is not going to stop easily.

Don't start doing high fives and talk smack to the bears. Just be thankful that the market gods are smiling down on us right now. Sooner or later they will extract revenge on those that take them for granted.

Have a good evening. I'll see you tomorrow.

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