To effectively trade market action like we have had recently, it is necessary to hold two contrary thoughts at the same time. The first thought is that the trend is likely to continue and the second thought is that it is going to end rather abruptly.
Many market players are incapable of this sort of mental gymnastics. They view the market in black-and-white terms. It is either bullish or bearish and there isn't much strategic thinking beyond that. Every day we hear arguments from both sides. There are the bulls that will tell us why this trend is not going to end soon and there are the bears with an even longer list of why the market is on the brink of the disaster.
Both sides have good arguments and luckily I don't have to choose. I stay with the trend and the positive action as long as possible and then when I start seeing losses and poor action, I sell.
I don't think this trend to the upside will last forever, but I don't want to try to guess when it will end, since no one else seems capable of doing that.
It really isn't necessary to be bullish or bearish. The best approach is to be opportunistic and reactive. Take what the market is offering and don't argue with it. You can be mentally prepared for a reversal as the same time that you are making money on the long side.
The market finally is seeing some sell programs hit after the buy algorithms have driven key names like Apple (AAPL) and Amazon (AMZN) straight up this morning. I'm managing positions tightly, but I'm still willing to buy if I can find some good entries. On the other hand, I'm still looking for a bout of end-of-the-year selling to hit. Yes, it sounds inconsistent, but that is the only way to navigate this market effectively.