The market action today is mild with the indices doing little but there are signs of increased indecision. There is a higher level of volatility in many stocks as market players debate whether it is time to take some profits or should they press long positions.
The answer to that question will depend on trading style and time frames. Those that are anticipatory and have a longer-term time frame may feel it is time to lock in gains in anticipation of a top. Those that are reactionary and have shorter time frames may want to press longs in hopes that the strong uptrend will continue.
I'm in the reactionary camp and still see nothing in the market action to suggest that a topping process has started. Yes, many stocks are extended and entry points are challenging but underlying support is strong, dip buyers are hard at work and fear of missing out should prevail into the end of the year.
A good example of the dilemma the market presents right now can be seen in the action of Ping Identity Holdings (PING) which is up about 15% in the last five days to a new all-time high. I like the stock and think it can eventually move higher but the entry point here is not attractive. Do I take some profits and hope there is a pullback that will allow me to reload my position? Or do I chase the obviously extended chart and hope that the momentum continues?
That is the dilemma of the entire market to some degree at this point and everyone has to develop their own strategy for navigating the action.
The only thing I know for sure right now is that the price action continues to be quite positive and when that is the case I assume that it will continue to act that way.
