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Led by materials, financials, and transportation stocks, the market is off and running this morning. Since last Tuesday’s similar opening gap higher, the major indices had been consolidating in a rather benign manner ever since. On is face, the continuation higher today is bullish. Nevertheless, there continues to be plenty of traders who doubt the durability of this move higher to start the new year. I wrote a post yesterday noting the lack of clear leadership to the upside, and I am still looking to see a clear group of leaders emerge, if the bulls are going to seize control of the market on a more intermediate-term timeframe. In addition, there are some fades I am seeing underneath the surface since the opening bell. Indeed, finding quality entry points in this market remains more challenging than usual for disciplined swing trading.
I currently have a few longs on inside 12631, and will be on watch to see if this move has staying power as the session progresses. I am not in a rush to put on shorts here, though, as the bears have essentially been lifeless thus far in the new year. The bulls are off to a solid start in 2012, but the real challenge for them will be to shake off the routine from 2011, where the big breakout was much more of a shorting opportunity than a buying one.
