Relentless Rally

When the momentum gets going, it feeds on itself. After the correction in July-August time frame, the market has bounced back. At first the rally was hesitant and now for past 4 weeks or so it has been one of the best rally to make profit in many months.
One characteristic of recent action has been weak opens followed by late buying. Which indicates the big institutions at play.
How market reacts to news also shows you the characteristic of market. All news, good or bad is good news for this market.
Those who were late to realize the start of the new up leg have been left on sideline. Most stocks have run up straight with not much pullback. Swing trades have been working well in such environment and catching 10 to 20% swing in many stocks in few weeks has proved very profitable.
Some of the day traders I have been in touch with are having best days in last 4-5 years in terms of return. A market where range is high with so many stocks up 3 dollars plus is dream market for short term traders.
In recent days the IBD Big Picture has turned slightly cautious and is advising waiting for pullback in leading stocks to get in to them, rather than chasing them. For your money the IBD The Big Picture market analysis is the best. It will keep you on right side of the market in most market circumstances. Six weeks ago, it started pounding the table, saying buy now, this is the time to be aggressive.
When a rally like this gets going at some stage there will be a dip. My dip indicators have started flashing warning signs on stocks which have ran up a lot. Besides that in last two days my email indicator has also perked up. I have been getting many emails from trader friends and some unknown readers, telling how easy it has been to make money. Second set of emails have also started coming in from those who missed the action and now realizing the mistake of being cautious, or listening to wrong kind of pundits, or having no defined methods. Any dip at this stage will be likely to be of short duration.
While bears wish for crashes and sudden plunges everyday, momentum does not die suddenly. It takes a long time for it to cool down. If funds are buying, their distribution is slow process. The Market Monitor continues to show a expanding bull market. New sectors and new leaders continue to breakout and that is a healthy sign.

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