The major indices are gapping up massively this morning, with the S&P 500 running directly into its slightly declining 200-day moving average. Shorts are on the run, big-time, and have not been given any real type of reprieve since the market turned on a dime back on October 4th down at 1074 and sprinted higher. If anything, the recent run illustrates that there is a huge difference between patiently sitting out a market in cash, waiting for better entry points, versus outright shorting a rally all the way up. While I have not been fully invested, I have been respecting the increasingly bullish action by methodically adding long exposure.
It is still very early in the trading session, so I am going to wait another twenty minutes or so before gauging whether the move has a good chance of sticking. I see plenty of traders on the Twitter stream eagerly stepping in to aggressively fade the move, which may mean psychologically that it will probably stick. Either way, I am still eyeing many of those financials that I charted last night.
Buying a gap higher is always a tough proposition, but as always I put it within the context of the chart. If it is a gap on a sloppy chart, I usually wait for a better spot. If the chart was tightening up an raring to go, I am more inclined to get involved. One chart hat I am watching here is Jabil Circuit, with potential to hold and continue this breakout from an ascending triangle pattern.