The unrelenting stock market rally continues to push higher with the NASDAQ finishing higher leading all major stock market indexes.  Volume was mixed with the NASDAQ experiencing lower volume while volume jumped higher on the S&P 500 (MarketSmith shows lower volume, but across all chart platforms volume was below average).  By most daily measures this market is overbought while weekly measures there is still room to run.  A few leading stocks had big days certainly a big change from yesterday’s dismal performance.  For all intents and purposes we are overbought and some sort of pullback would help clear these conditions opening the door for continued success in this uptrend.  Until then continue to stick with strength and shed weakness.

Two big moves today were from ACT and BITA.  Both stocks have been acting well as of late and both proved to be big winners.  ACT bought out AGN giving a big boost for the stock.  While BITA continues to be an earnings winner.  It pays to stay on winners and ride them until they give an indication their trend has ended.  Keep it simple and stick with winners.

Wednesday we will get a peek at the most recent Federal Reserve meeting minutes.  While these minutes tend to tickle the market algos it does not typically move the market like a meeting does.  With that said, there is always the potential for a surprise leading to plenty of fireworks.  Of course with the market continuing to make new highs plenty of traders will be gaming for a market fall.  Keep in mind this week tends to favor the downside more than the upside.  In the end, it comes down to how the market reacts and we will be keen on price action.

So many try to time market turns and go heavy.  There is a line in the “Money Never Sleeps” movie where Gordon asks his managers not to try to pick turns.  While we aren’t advocating buy and hold we simply want our subscribers to reduce exposure when genuine trading signals occur.  If you want portfolio protection write calls or buy some puts to hedge your exposure.  You can even use SPXU and others to hedge your portfolio risk.  The takeaway here is to keep from trying so hard to pick market tops and ride the wave higher.

We certainly like to see the overall market consolidate here with our leading stocks continuing to push higher.  Time will tell if we get our wish.