Well what a difference a week makes. It seems like yesterday people were ready to call it a day. 2 weeks ago people stopped trading and sold their positions and were ready to start new. Now the markets has swung in a big way and people are starting to put money into work. Looks like a sucker signal to me. We have had a fantastic run of late. Buy on the dip play still works just the dip was bigger this time. bottoms are a process even shorterm bottoms. I dont expect us to just run straight to new highs (even though its possible) Typically you have to hit resistance a few times before breaking though. Sentiment has really approved. People are getting giddy again. The market is nasty cheating whore and will always break your balls when you least expect it. Be wary of the trap. This would be a great time for her to roll over trapping everyone.
Ironically if you want to see a real lasting rally we will need a slgiht pullback as another gap up today will unleash some overbought readings which couple with overhead resistance can lead to nasty snapbacks.
Think of the market as a rubberband. The more you stretch in a particular direction the harder the snapback.
As my style goes. when mkt gets overbought and near resistance I raise cash. Im at about 50% cash now in my trading accounts for some very eggregious boooooooooms. I will add positions on dips.
In the meantime I will shorten my timeframes and trade quick breakouts.