Reaching for the Sky

And just like that, the S&P 500 is back printing multi-year highs this morning, at 1426.

Even though I have treaded lightly since April of this year, I have refused to fight the persistent bulls along the way because of that pesky rising 200 day moving average. When the market seems confusing and flashing mixed signals, observing the direction of a long-term reference point on the senior indices like the 200 day is often a useful tool for seeing the big picture. This whole time, the 200 day has indeed been rising, as I pointed out nearly every day in my market video recaps even at the depth of the 11% spring correction.

When the market pushes higher in a way it is doing now, all of the seemingly reasonable and practical calls for a top go by the wayside. The reason for that is likely because too many market players are either short or way too underinvested for the market to actually roll over. Beyond that, as I pointed out the other night in my post on the KBW Index (BKX), the bears had plenty of chances to roll this market completely back over and failed each time this summer. Instead, the bulls kept coming back and reaching for the sky.

I see quite a few individual charts that could probably use a few days of resting, but then again with many traders likely out of position we could easily keep pushing higher to frustrate the majority.

Inside 12631, we are sticking to the game plan of methodically legging into good performers, quickly cutting losers, and being in tune with the tape. Come check us out.