The indices are doing a nice job of building on last week's momentum but there is quite a bit of churning after the gap-up open. Breadth is robust with over 5000 advancers to 2000 decliners and there are over 750 stocks making new 12-month highs.
The difficulty at this point is that entries require chasing technically extended patterns. That can work but it is important to manage trades very carefully when you hitting the upper Bollinger Bands.
I still have too much idle cash but I've been a net seller this morning simply as a matter of trading discipline. Many of the small caps that I've favored have earnings coming and I'll almost always reduce risk into an EPS report. InMode (INMD) , which was a recent stock of the week, broke to a new all-time high this morning and I used the strength to reduce my position. Earnings are due tomorrow.
SmileDirectClub (SDC) turned out to be a good bottom fish play two weeks ago and I'm reducing that some today. Earnings are due November 12.
I'm digging for some new long inventory but the entry points just aren't there right now. I'll focus on keeping accounts near highs but taking some gains into strength.
I'm still very optimistic about some good entry points but discipline is the key. Technically this action is very good but that doesn't mean that you should be less selective with your stock picks.