Despite the rally late yesterday afternoon back up to even or slightly green on the indices, the bears and cynics are out in full force again this morning claiming victory for a market top. The factors that keep me constructive here are the rising major moving average on the senior indices, coupled with continued encouraging price action in many individual stocks underneath the surface. Beyond that, the bearish arguments are starting to become quite well-known and obvious at this point, as we head into autumn.
Looking at my portfolio and watchlist inside 12631, I still see plenty of issues barely trading lower, and are instead building tighter technical bases on their respective daily charts more than at any time that we have seen in many months. As an example, consider the AAPL analysis I had mentioned each of the past two days in my video market recaps. The high volume selling on Tuesday seems to have been forgotten by the market, and the prevailing trend higher has been pulling rank ever since, given the tight consolidation that is taking place in that stock instead of a violent rollover.
Thus, I am on the lookout for hot momentum action that the market is still clamoring for, as opposed to trading scared that we are at some kind of major top or vicious trap. After all, if you enter a trade with a protective stop-loss, you should not be trading out of fear when the market has improved technically in recent weeks.
Highly selective aggression ought not amount to trepidation.