Fitz Bits: Ride the Bull

OK, let's look at some charts. IAC/Interactive (IACI) United Rentals (URI) Lockheed Martin (LMT) Microsoft (MSFT) Monday was a pretty good day for the bulls. The Dow Jones Transportation Average advanced nearly 2% and closed at an all-time high. The Dow industrials likewise finished at an all-time high. Oh, and since I'm looking at the major averages, so did the S&P 500. Simply put, this market is ready to run. Actually, it's never stopped running -- it just paused to catch its breath. The S&P Midcap Index and Russell 2000 small-cap index are both lagging, as is the Nasdaq Composite. But all of those indices are stable, and they're showing signs of moving higher, not lower. This is a market that's not going to let you in if you are too picky about entries. If you are loaded with cash and waiting for the big pullback, you are destined to be unhappy. Big corrections never occur when they are widely anticipated. To the contrary, widespread anticipation (that is, hope) of a pullback is the very thing that keeps the market going. Market timers will lay low, holding their cash in order to pounce on the big correction. But as the correction fails to appear, that money slowly and quietly starts getting put to work. This buying is what keeps the market moving higher. Rather than go through that brain damage, just get involved. Buy the large-caps that are working. Let the bears do the work for you -- they are gradually capitulating. The time to be fearful is when there are few bears to be found. But right now, with a slowing economy in China, a crisis in the Ukraine and a sluggish domestic recovery, there is plenty of fodder for the bears. They remain at large. Remember this: Waiting for a correction is different from watching for one. Put another way, if you are out of the market because you are waiting for the big correction, you are getting left behind. But if you are in the market and watching for a correction, you are operating from a position of strength because your money is working for you. Moreover, it's better to be focused on protecting profits than it is to be hoping for a big correction that lets you in. The former makes you money, while the latter just makes you unhappy -- and unprofitable. Ride the bull until it bucks you off. Last December, IAC/InterActive shares created a gap between $61 and $64 before they ran clear up to $80. The last few months have seen a decline that has finally filled that gap. The last time the bears tested the IAC/InterActive 200-day moving average back in mid-2013, after which the stock resumed an uptrend and ran more than 70%. I'm not saying the same thing will happen this time, but I am saying that the 200-day line is proving to be a reliable level of support. I recommend buying this bounce and keeping a stop just below the most recent low. United Rentals has been a favorite, and a long-term holding of mine, for quite a while. This stock has been a reliable capital-gains generator since 2009, having run from a low of $2.52 up to nearly $100. I'd like to say that I've owned it all the way up, but I'd be lying. But I will say that I'll continue to own it for the foreseeable future -- and I can see a long way into the future. Monday's breakout was a signal that this rally is not finished, and I think a breakout above $100 is imminent. That, in turn, would pave the way for even higher prices. Stay long. I have a big mea culpa on Lockheed Martin. Last month I was faked out by the pullback below the 50-day moving average, and I noted that it was time to take a profit. It turned out that the pullback was the result of profit-taking -- though not enough to halt the uptrend. The supply was quickly soaked up by eager buyers, and the stock is now back to challenge the early-March highs. At the risk of being wrong twice, I'll suggest that this is a stock to be bought, not sold. The entire defense-and-aerospace sector is on the rise, and Lockheed Martin is at the front of the pack. I was wrong! Stay long! Microsoft is a stock that I watch but haven't traded in years. Frankly, I hate the latest Windows iteration and wish I could go back to the old one. But, alas, all I keep seeing are pop-ups asking me to upgrade to Windows 8.1 for free: Would you like to do it now, or shall I remind you later? What's omitted is a third choice -- Never remind me again -- or a fourth choice: Revert back to the old Windows operating system, which was working just fine. But, with that rant out of the way, I like the way Microsoft is trading. The stock is in an uptrend of higher highs and lows, and it is pulling away from the 200-day moving average. You can see, from the price action, that the stock is a bit choppy. Given this, I suggest giving the stock a bit more room to wiggle by keeping a stop well below current levels. If Microsoft starts trading below the 200-day moving average, it'll probably be time to close out the trade. But until that time, stay long. Be careful out there.

Fitz Bits: Ride the Bull

This market is ready to run.

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