Although the indices are hitting all-time highs, there is a very high level of anxiety among many traders. They are having a difficult time simply riding the momentum, particularly when the action is narrow and so many stocks are extended.
The way the market is acting, it practically begs you to try to call a turning point. There are a dozen compelling reasons to look for a reversal soon, but the price action will not confirm those arguments.
I try to deal with this nagging inclination to call a top by staying very conscious of the temptation. I have to be mindfully bullish because it is easy to be swayed to the dark side. It is obvious that when a downturn does come, the opportunities for big profits on the downside will be the exception. That is what makes calling a top so appealing.
Despite the tremendous temptation to declare that the end is near, I look at my screens and I see stocks like Alibaba (BABA) , Sarepta (SRPT) , Jupai Holdings (JP) , Nutanix (NTNX) and Michael Kors (KORS) with big momentum gains. When there is action like this, it simply doesn't pay to focus on market turns. What pays is to keep on riding that momentum to the bitter end.
I'm tired of the way this market acts and would like to see a shift, but we have to stay focused on what works, and what works is those stocks that are making strong moves. The bottom line is the bottom line and it keeps saying "stay long."