After some weak action on Tuesday and an intraday reversal this morning, the bears had an opportunity to take advantage, but they failed yet again. Speculative buyers went to work on the dip and strength in groups like precious metals and solar energy pushed the S&P 500 back up to its opening highs.
Although it was a solid bounce, breadth was mediocre with about four gainers for every three losers. The mighty Apple (AAPL) continued to trend higher and that always offsets weakness in hundreds of other stocks.
I try to stay with strength, as long as possible, but I couldn't resist the urge Wednesday to do some repositioning and raise cash levels. It has been a great run and the speculative action is becoming so frothy it is making me a bit nervous. By the end of the day that looked like a poor decision, but we'll see if the buying can continue at this pace for a few more days.
It is becoming more difficult to find new merchandise; I'm tempering my bullishness, but things can change fast and I'll by making buys as I find entry points.
This market is the most similar now to what I can recall of 1999-2000. Some of the valuations are clearly excessive and fundamentals are not at all important. But the big lesson during that time frame was that the crazy uptrend can persist much longer than seems reasonable.
There will be warning signs as the character of the action shifts, but I will a bit too anticipatory in moving on some concerns.
Have a good evening. I'll see you tomorrow.