Halloween Hangover…or Still Drunk

____________________

Despite the herky-jerky price swings overnight and this morning, the market did in fact fill the gap up to the opening sell-off on Halloween Monday. The nature of the increasingly random price action is what is most concerning, but somehow it keeps shrugging off the idea of a major leg down. It is often said that a bull run climbs a wall of worry, so perhaps that is what we are seeing right now.

I am doing my best to stay nimble and keep an open mind about where the market goes from here. From a big picture perspective all that has happened since the multi-week rally in October is a backtest to prior resistance, which ordinarily should become newfound support. Unfortunately, the price action in 2011 has been out of the ordinary in many respects, borrowing characteristics from both bull and bear markets at various times, with a higher degree of sensitivity to headlines.

As far as individual plays are concerned, the underlying energy to these moves is still a bit problematic for me. Nonetheless, I am not interested in the fighting the market if it wants to go higher here. In particular, the cloud-computing plays such as CTXS and RAX look playable.

____________________