Securities Research Services

Wednesday, February 07, 2007

Broad Market Makes New Highs

The public continues to refuse to recognize that the market is in a strong uptrend. Ever since this trend started in late July the public has been trying to guess at a top and each time the market powers higher they are forced to cover their shorts at higher prices and as such adding more fuel to the bullish fire.

Bears have continued to furiously purchase put options even as the broad market made a new high yesterday. Scans show an underlying degree of buying that could power this market higher for some time to come.

The trend is up and dips are buying opportunities until the trend changes. We certainly would at the very least avoid the temptation to try and call a top in this strong market.

All of that said, don't lose sight of the fact that the market always has surprises up her sleeve. Bet on the upside, but make sure to honor your stops in case something goes wrong.

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