The opening strength was faded but the dip buyers bought that pullback aggressively. When the dip buyers don't even wait for things to go negative before they jump in, you know how anxious they are for long inventory. We really have some amazing momentum in this market right now and it is running over both the bulls who aren't positive enough as well as the bears.
I discussed it a bit yesterday, but I want to point out again what I believe is driving this market. It is the simple fact that the bulls still have buying power. It has been an ongoing dynamic that has been quite confusing at times. We have a lot of bulls and they still have lots of cash. Markets don't top out when everyone is positive but still trying to find new things to buy.
The dilemma of this market remains the same. To what degree do we embrace the obvious momentum when it is equally obvious that we are technically extended? Strong markets have a way of frustrating those folks who try to apply a "reasonableness" test to the action. What may offend your sensibilities is meaningless in the context of this sort of price action.
I've been gradually raising my cash levels, not because I'm bearish, but because my trading discipline is to take some partial profits into strength and to look for new buys that aren't too extended. That approach leaves me little choice but to maintain a fairly high cash level.
Despite my lack of new buys, there still are some good movers among names I've discussed before and am still holding. Tesaro (TSRO) , Acacia Communications (ACIA) , Yirendai (YRD) and BioTelemetry (BEAT) are at the top of my list.
I'm heading out for a few days to attend my son's baseball tournament at the new Cal Ripken facility in Pigeon Forge, Tenn. I'll be checking in. Good luck and I will see you on Monday.