Betting on a Leg Up

In like a lion, and out like a lamb. Is that a saying about the weather or the stock market?

Here in New York City, it could apply to both. Sure, the indices have lost ground so far in this final week of March, but for some reason the weakness seems less manic than in the past month. And what volatility there was last week -- specifically, Wednesday, March 21 -- was actually constructive. It was then that the market matched its violent lurch to the bear camp on Feb. 27 with a notable move back into the arms of bulls.

Interesting times indeed.

As with last month's collapse, I am less interested in ruminating on what caused the impressive surge last week than in trying to take advantage of it. The first question to answer: Is this new potential strength in the market likely to last long enough to be taken advantage of? Given the power behind the bullish move, I think the odds are better than even that it could last for at least a matter of weeks.

This stance is hardly one of a rampaging (geopolitical, subprime, imbalance worries be damned) bull, but considering the immense number of values that insiders have pointed us to over the past few weeks, I decided to chomp instead of nibble at them. After going all the way up to 75% cash by mid-March, I'm now back to being 75% invested.

If I can ride a market upswing for several weeks, this new commitment of capital should prove worthwhile. (I'll expound on where the new money went in columns later this week.) I'm not a trader, but I don't mind a monthlong round trip if it makes me money.

I'd prefer, of course, for market sentiment to become supportably more bullish in coming weeks as a result of calming global economic data and steadier trading. That would allow me to be the longer-term investor I strive to be, and get me back to being fully invested after buying yet more stocks.

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Jonathan Moreland is director of research and publisher of the weekly publication InsiderInsights, founder of the Web site InsiderInsights.com and the director of research at Insider Asset Management LLC. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, Moreland appreciates your feedback; click here to send him an email.