Trapped Bears - But I Also Got Caught Today

The bears found themselves trapped this morning after they over-anticipated a "sell the news" reaction to a very strong jobs report. We did slip slightly in the early minutes of trading but once again there were plenty of buyers who were ready, willing and able to buy the very slight pullback.

I was trading well today until I got too aggressive with C. They faded that one heavy in the last hour; I kept buying August 4 calls anticipating a bounce that never came. Once the indices made a new high for the day, the squeeze was on and the rampage of selling and short-covering commenced. Things cooled off in the afternoon and lots of folks hit the exits early, but there was no mistaking that the bulls are still very firmly in control of this market.

Despite this euphoric action, it continues to be a very difficult market for many. There still is a large contingent of folks who have a very hard time reconciling this extremely strong market with their personal feeling about the pace of an economic recovery. The market is acting like it is clear sailing ahead, and the jobs data supports that rosy view, but many folks have some serious doubts about the pace of a recovery.

In addition it has been an almost parabolic move since the Meredith Whitney upgrade of GS and the strong report from INTC to kick off earnings season. We have had a few days of flat action but then it is straight back up again.

The only way to get into this market is to pay up and chase and that is not the favored methodology of many. If you have any level of idle cash, it has been exhausting trying to find ways to put it to work as things run away.

For such a strong market, I hear an awful lot of complaints and that is what is helping to keep it going. This market won't let anyone catch up with it and that is wearing out many who keep looking and hoping for some rest. They aren't getting it so they capitulate and pay up for something -- which keeps the whole process going.

As I've often written, strong markets will always go higher than you think is reasonable. That certainly seems to be the case with this one.