_________________________

This market continues to push higher, and calling a major top is starting to look more and more like a sucker’s game. We are indeed seeing some stocks become extended, but as I have been discussing I am more interested in finding issues setting up behind the leaders in which to rotate, as opposed to moving to 100% cash on the sidelines. It is very easy to cherry-pick a given indicator or any individual event that happens in the market and extrapolate out that the market is topping or is on the cusp of the a steep correction. However, Mr. Market has a great knack for turning even the most polished of veteran chartists into incorrect fools.

In other words, even if the broad market is short-term ahead of itself, one should not dismiss the notion that the indices could simply cool off sideways while individual stocks continue to work well. Of course, the trick is finding those stocks that are performing well. From my vantage point, the way to do that is by putting in hours of work to isolate the very best charts, all the while cutting laggards and being patient with winners.

The bears are not the only ones on the run today, as cautious bulls have yet to see the pullback to 127o or so on the S&P 500 that many veteran technicians had complacently assumed would materialize. Underinvested traders are now in a tough spot of whether to chase this market or higher, or risk sitting out the ride. We started out this year ready for anything inside 12631, and were able to quickly adjust to the upside, as is our modus operandi.

If anything, the past few weeks of price action should teach you that even the most esteemed, veteran traders are not exempt from needing to be open-minded, nimble, and able to adjust to changing market conditions in order to achieve success.