We had classic bear-killing action to wrap up the week. After a couple days of soft action and a poor open, the bears were feeling more comfortable. Given that it's Friday and things looked slow, it was unlikely that the bulls would be able to get much going.
Wrong! This was the perfect setup for dip-buyers and high-frequency trading to drive the market straight up off the early lows. Volume was lackluster, but that doesn't seem to matter as the action catches folks leaning the wrong way and then feeds on itself. The straight-up nature of the trading is an indication that it's machine-driven to a great degree, but the hot money, looking to catch some momentum, is out there as well.
Once again, this is a good illustration of why I keep repeating that we should avoid focusing on top-calling. If you are trying to call a turn in this market based on big-picture considerations, it isn't working. The way to make money is to stay focused on the micro and to trade individual stocks.
I'm already hearing talk that end-of-the-quarter window dressing is very likely to keep a bid under this market next week. I'm not sure how much upside that might produce, but I'm confident it will give us good support and I plan to stay focused on long plays.
This market has been amazingly consistent all year, which is great if you churn out trades day after day. It isn't very interesting if you like the drama of making big market calls, but making money is a good remedy for boredom.
Have a great weekend. I'll see you on Monday.
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