I'm always surprised at how sticky the market can be to the upside. Despite lots of good reasons, both fundamental and technical, for a little weakness we just don't pull back very much. Buyers are still looking for entries, and who can blame them? They keep on making money by chasing this market. The big mistake is looking for reasons and excuses to not buy this market.
Breadth has improved form this morning and we are now running positive. There is some decent momentum in select big-caps like Google (GOOG), Green Mountain (GMCR), VMware (VMW) and LinkedIn (LNKD), but there is a lot of lethargic action as well. It just doesn't pay to bet against this tenacious underlying support.
I find it helpful to think of this sort of action as being like a Ponzi scheme. As long as there are other buyers out there you can still make money by buying ... even if there is no justification at all for the action. The important thing is that you not be slow in selling when the house of cards eventually topples.
With that mindset in place, I just keep looking for new buys and keep the time frame short. I try to avoid the being sucked into the constant top-calling and stay focused on finding new things to buy that might run for a day or two.
Many market players don't like this approach, because it is dependent on a constant stream of new ideas. It is much easier to just stick with a few favorite stocks -- but moving in and out of the names that heat up for short periods of time reaps the best results.
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