Buyers Don't Back Down

Buyers are waiting below soaking up the dips so we could see this rally continue unabated for at least a few more days. Nevertheless, expect quick, frightening pullbacks that shake out weak longs. Looking at the longer term charts, technically there is no reason why we couldn't see a repeat of the type of rally that occurred from the April 2003 breakout, which didn't top off until January 2004. We are already starting to see some of the hyperbolic moves in some of the more high beta stocks that were so prevalent during that rally. Over the past two years traders have been conditioned to sell the breakouts and we have struggled to make 10% gains. Longer term subscribers will remember that during the 2003 it was not uncommon to see stocks make quick 20%, 30%, and even 50% or more gains. We are not trying to put subscribers in an overly exuberant mood where reason is thrown out the window. There are no guarantees that we will see a repeat of 2003 this year. However, we are trying to get everyone to look at the bigger picture and to start thinking less along the lines of "sell the breakout" to "let's exercise a little more patience so that we don't miss the larger moves."