Mark this date in time: Cramer, the Trading Goddess and the Technician are all in alignment. Which means either big things are going to happen or we'll have the biggest bust since 1929!
Now, if you've been reading almost any of my columns, you should have figured that I've been long ever since everything started breaking out of congestion. The
hitting a new high? Nice, but it's late to the party. Shoot, some of my winners from the past few days like F, LU, EMC and a host of others broke out long ago, signaling either a gigantic fakeout or something big afoot.
Best of all, this party keeps allowing guests to come in, because thankfully, everything's not going straight up. Instead, we're given a little pause, and a small window of opportunity almost every day to be a bull. That last-hour selloff in stuff like AOL? Perfect. It went into a little congestion period near the close, and you can bet that's one I'll be watching tomorrow waiting to see if it busts out again. And if not that, then MRK, or MWD, or MSPG, or AMGN, or ... well, shoot, just about anything!
Now, lest you think I turned into a buy machine, I'm still treading cautiously. It is easy, in fact,
, to get carried away with this stuff. I found myself looking for something,
, to buy late in the afternoon. Finally, I turned off my charts, and called it a day. Better to stick to my methodology, then get carried away in the moment. Buy on breakouts from congestion. It's a mantra I have to repeat about 50 times a day just to keep myself in line.
How long will this last? How high will it go? Anyone who tells you the answer is guessing. Is the market now overbought? Strong bull markets are
overbought. And baby, this is one strong bull market!
Gary B. Smith is a freelance sportswriter who trades for his own account from his Connecticut home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. His column, Technician's Take, appears every Monday. His Q&A column, TSC Technical Forum, appears every Saturday. This is a "bonus" column.