There is a general market belief that when something becomes very obvious, it will stop working. The logic is that traders will keep anticipating it and eventually destroy the conditions that make it work.
That makes sense, but it sure doesn't apply to the dip buying in this market. The buying of the gap-down open was painfully obvious, yet it still worked extremely well. We are trading straight up off the open, and the SPY is almost green already. We have completely ignored the BoJ panic that took down the Nikkei and the European markets overnight.
The bears keep thinking that this pattern is going to suddenly collapse and trap all those unthinking bulls that embrace it repeatedly. It is obviously lacking in great intellectual insight, but it works and that is why it keeps working.
What you have to understand about this market is that it is driven by structural issues, rather than fundamentals or even technicals. What drives the price action is traders trying to put capital to work. Their motivation for buying is simply that buying works. It doesn't matter what the news might be, or what arguments the bears might make. Buying each and every dip works, so that is what you keep doing until it stops working.
This sort of market really offends many serous market players. They want to believe that all those fundamental issues and macro matters they focus on are of great consequence. Some day they will matter, but if you don't recognize the fact that they are irrelevant right now then you are likely to be on the wrong side of this market.
I'm having some good luck with small-caps like Mitek Systems (MITK), Yirendai (YRD), BioTelemetry (BEAT) and DRDGOLD (DRD), which have all been featured as a Stock of the Week in the past.
I'm still working on deploying more capital, but it isn't easy. It is hard enough buying if you are bull. Trying to navigate this market with a bearish bias is practically impossible.