Strong markets stay sticky to the upside, they don't just fall apart suddenly, which is why I have been in no hurry to fade the Janet Yellen rally. The bears continue to have very compelling arguments, but the momentum is still possible. Rather than try to anticipate a market turn, I prefer to react once I see a change in the price action.
Despite the continued strength, I have been a net seller of a number of small-caps that have had a good run over the last few days. Names such as my two stocks of the week, Square (SQ) and Orbcomm (ORBC), have had solid gains. Other small-caps, Centrus Energy (LEU) and Alarm.com (ALRM), offered the chance to take some profits.
I completely understand the bearish bias of bears like Doug Kass, but the easiest mistake to make in this market for the last six years is to underestimate upside momentum. Time and again it just keeps going when it seems totally illogical.
I'd rather forget about predicting a turn and stick with what is working until it stops working. I won't be the hero that nails the exact top, but I believe I will produce better returns with this approach.
I'll maintain a bullish bias and keep looking for new buys, but today I'm a net seller so far.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider LEU to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.