Bulls On Parade

Happy New Year. A surprise bump in China PMI is being touted as the reason why the futures were up a full 20 handles when I woke up this morning. But even though it was a difficult trade, we were long already. The action in the futures merely confirms that the S&P will likely test 1292.66 and exceed it. This should set the bulls into overdrive.

1308 is the 78.6% retracement of the move from the May 2011 highs to the October 2011 lows. I suspect that's where the market wants to go. But as soon as it clears 1292.66 (if it does) I will be watching A/Ds, volume, ticks, and a grab bag of other market internals to alert me when it might be ready to give it up.

We will likely hear "risk on" until it sickens us. We will probably hear "the bull is back" and that "1400 is next!" They might be right. They might be letting the market jerk them around too.

Find a method, develop rules, and follow them. Sure you might get jerked around here and there, but at least you'll know it. And you'll avoid being part of the madding crowd.