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With every sloppy chart in sight breaking out, it is understandable to see traders shunning all forms of discipline. After all, if only price pays, then what good are a bunch of stupid trading rules by which to abide? So, the chase is on, and it is without shame. Indeed, there is nothing wrong with playing along in a market that is hell-bent on perpetually dripping higher. The key is to do so within the context of setups that are “clean.” As an example, let’s take a look at a stock that I am currently long: NCT.

This is the type of chart that I am comfortable holding in a market filled with setups that I would usually consider to be less than attractive, in terms of the risk/reward profile. Here, however, we see a tight base that broke to the upside on volume, and is now flagging high and tight. I am keeping a tight leash on all positions here, and will let 12631 members know in real-time when I sell, but consider this chart of an example of the kind of setups that I believe are only worth playing when the broad market is stretched, but even more stretched by the day.

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I suppose I could post a slew of daily charts of the major indices, but they would all show essentially the same thing: A slow drip higher that is becoming laughably predictable.

Heading into an OPEX Friday and a long weekend (market closed on Monday for Presidents’ Day), I am curious to know where you think we are going from here. Topping out? Melting up? Blowing off?

Chime in. Vent. Mock…

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In Woodshedder’s latest recent post, he expounded on his trademark “Honey Hole” thesis. In that light, I am going to humbly offer another candidate to be part of the inventory in our new joint venture: “Honey Hole Outfitters” (see pic above of the grand opening).

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To update my ongoing series about the Shanghai Composite and the noted China bears (Chanos, Hugh Hendry, etc.), here we have an updated daily chart of the Shanghai. The inverted head and shoulders bottom from last summer was confirmed and even went beyond the measured move higher, before pulling back since November. Essentially, this pullback amounted to a retest/gap fill down to the neckline of that head and shoulders pattern.

As we can see now, the retest looks to have held. In other words, those China bears pining for a deflationary collapse are going to have to bide their time for the foreseeable future, as the presumption is that the uptrend will now resume, especially if the bulls can recapture and hold 2,950.

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[youtube:http://www.youtube.com/watch?v=g10kNyuLuF4 550 412]

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I’m still bullish on Gold, Dougie! Prepare to be squeezed into a generational top bankruptcy court!!!!