The "never sell a dull market" mantra certainly proved true today as the indices continued to drift higher. The Nasdaq and S&P 500 made new 4-year highs while the big news for the Dow was it turning positive for 2005. The Dow is still some 160 points off of its 2005 high but at this rate it will hit that level by next week. With the market so extended after four weeks of a steep rally I'm finding few if any long candidates that I like. I think that initiating swing trades at this juncture would be nothing more than playing musical chairs. I'm just glad I have some longs in my long term account because I'd hate to totally miss this move.
Reminds of the action over last Christmas. The market ran up on light volume while most were on vacation. The moment the New Year came around, we saw a big drop on volume as people took profits and then some.
Perhaps we might see something of the same on a smaller scale; a runup on light volume this week, followed by a hard sell-off next week when everyone is back.
this is a great environment for long swing trades, especially with bull flags and other continuation type patterns. these are really working right now.
just buy the range contracted low risk entries.. and identify your minimal risk in advance.
my current port is on my blog.