The market makes new highs for the year as one of the most hated rallies I have ever experienced continues. After looking like we were on the verge of breaking the uptrend last Tuesday, we have now managed five straight up days on mediocre volume, although on good breadth. It isn't what looked likely from the charts last week, and the big-picture bears would be laughing at how ludicrous the move is if they weren't in so much pain from being squeezed so hard...
I'm hearing talk now about how this is a typical "late in the rally"-type action or a 'blow off' top. The bears just become so frustrated that they give up, and the bulls run amok. You get the feeling that the market will never pull back again and that you are a fool if you aren't just loaded up and riding the momentum train.
My main thesis for a while now is that no matter how good the bearish arguments may sound, we have to respect the price action, and there is no question that it is positive. We are a bit extended now after moving up five days in a row, but you just know that there are dip-buyers lurking about. Given that we haven't had any dips, you can be sure that the first one or two are going to be snapped up quickly.
The action today felt a bit like 1999 to me. We even had names like YHOO, EBAY and CSCO running. The bulls just ran over anyone who had any doubts about this market, and if you aren't willing to chase, then you aren't getting in. That sort of action can persist much longer than you think. In fact it already has for most folks. Just be careful about trying to time a top here. It is a lot harder than it looks...
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