The sp500 did not waste any time getting up and through 1303 today so far. How we close today is still an open question but the strength is undeniable. This market continues to trade with unstoppable confidence. It is tempting to short these types of markets but it is not advised.
BestOnlineTrades since September 2010 has been writing about the inherent strength in this market and the strong tape action as well. We talked about the fact that the market only managed to do a 38.2% retracement of the March 2009 to April 2010 advance. And that this was an inherent major sign of strength of the market and its underpinnings. We also talked about how the market’s inability to create a bottoming tail for the yearly 2011 candlestick was also an extreme sign of strength.
Granted we have issued a number of BOT short and Neutral Signals since that time, but our major theme has been one of relentless bullishness.
As Jesse Livermoore used to say if it is wrong to go short then the long side must be the right side. This continues to be the case in the present time frame in our opinion.
I very rarely tune into CNBC but I happened to be watching briefly in late January and Cramer expressed something which I really think holds true in the current time frame. He expressed the fact that we are in an amazing bull market and that it resembles to a degree the bull markets of the early 80’s or 90’s. He also said that a lot of people are afraid to simply acknowledge this fact and instead are constantly finding reasons to be afraid or look at the market with a glass is half empty approach. Watch his CNBC clip and see for yourself.
This is a very good point he makes. I have heard very few willing to acknowledge the supreme power of this current bull trend, recognize it, respect it and let it be. Instead there seems still be a constant sentiment of fighting the trend or the inability to shake off the mega bear trend from 2007 to 2009.
On the other hand it is understandable because of the seemingly near vertical price trend that has such a hard time getting a 5% correction going. This is unnatural and somewhat unbelievable.
But here at BestOnlineTrades we theorized that the market and sp500 may be trading into the parabolic which helps explain this type of action. It will be especially interesting to see if it can do so right into mid June 2011.