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The S&P made more new highs today and the train keeps rolling. When a stock or an index is at all time highs its very difficult to call a possible top because there is just no overhead resistance, so we are reduced to just playing it day by day and riding the momentum. This is still a hated and misunderstood rally and it is quite possible that we just edge higher for a while. There sure aren’t any willing sellers.
There are short squeezes everywhere in names like NFLX, GMCR, DDD and TSLA and the shorts are suicidal. It’s a greta time to be long as long as you stay alert, raise your stops and maybe play smaller size as we get into the nosebleed seats. So dont stop trading, just try and trade smarter.
What I’ve been doing is “trading around” core positions. As an example, if I’m long a core position of say 1000 DXJ (just using it as an example) I may go up to 2000 shares if it looks good and the market is strong. Over the course of the day I will scale out at profits, but keeping the 1000 share core position. It’s just a way to stay long, but add some alpha along the way. As you know I usually sell small pieces into strength as you can see on the P&L.
I raised stops again tonight, so if you are following along please check it out.
I am adding one new name to watch tomorrow. Keep your eye on it for a possible breakout through the 7.46 level. It has a nice five day flag after the breakout and volume has been good.
UVE
