If you have been paying attention to the market action since mid-December, you had to wonder if the market was capable of building much additional momentum. The open this morning showed the buyers were still hunger for more exposure, but the bears anxiously are looking for an intraday reversal as some overbought indications set in.
Breadth is very strong once again at much better than 2 to 1 positive and we already have more than 730 stocks hitting new 12-month highs. The animal spirits are running and you can feel the misery of those who are struggling with feelings of being left behind.
In my opening post I discussed how the Trump skepticism is helping to push this market higher as there is still money on the sidelines and the fear of missing out is building. I believe the media have been benefiting the bulls as their predictions of disaster have been very loud and unrelenting. How can the market continue to run higher when we are facing doom?
My Stock of the Week is Cliffs Natural Resources (CLF) . I discussed this one a number of times last week and it is moving to new recent highs today as there was some optimism about continuing demand for iron ore from China.
A few other names I've mentioned lately including AXT (AXTI) , Zosano Pharmaceuticals (ZSAN) and Global Blood Therapeutics (GBT) are sharply higher. Applied Optoelectronics (AAOI) had a big target increase and other optical names such as Oclaro (OCLR) are benefiting.
On the big-cap front, Alibaba (BABA) is developing very nicely. A target increase of Apple (AAPL) is helping to boost the indices today. (Apple is part of Jim Cramer's Action Alerts PLUS charitable trust.)
It is extremely tempting to try to call a market top as things are now starting to feel a bit frothy, but sticking with momentum usually pays far better than trying to call turns. Just manage positions carefully and let them determine your market exposure.