For the second day in a row, we had a little profit-taking in the final hour, but that didn't stop the senior indices from finishing in positive territory. Once again, the buyers just kept on coming, and there was plenty of positive action to be found.
The market continues to do little wrong, but that doesn't mean it has been easy. I've seen a steady stream of complaints from traders who don't want to pay up for extended names but don't want to short, given the very persistent strength.
One of the central rules of momentum investing is that you respect the trend until there is good reason not to. So far, we haven't had any good reason to believe we are about to fall apart. That doesn't mean that you stay highly aggressive with your buying, but since we have such obviously strong underlying support, we should give the trend the benefit of the doubt.
Typically a new month kicks off with some cash inflows, but we are due for a little bigger bout of profit-taking soon. Trading should also slow as earnings season winds down and summer vacations kick in. That will give us more choppiness and, hopefully, some interesting trading...
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