The major stock indexes traded higher today, with volume a tad higher than yesterday, though way short of anything meaningful.
Officially, the Dow Industrials rose 0.5% on NYSE volume of 4.8 billion shares, while the NASDAQ advanced 1.1% on 2.3 billion. The leadership profile remains positive, with 404 stocks making new highs versus 55 making new lows.
The short term momentum oscillators remain positive, confirming the bullish stance of the AlphaKing Trading Indicator. We have no new trades at this time.
The stock market finds itself on the cusp of a massive decision, as the battle that sees the action of individual stocks pointing to an acceleration of the uptrend - AKA blow-off - versus the struggles of the stock indexes themselves that opens the door to the uptrend dying a very violent death right here right now.
The next Missouri “show-me” move should be quite telling in this regard, and one likely to set the direction of the next 20%+ move to land over the next couple of months.
Investor sentiment gets more scarily bullish by the day, and history highlights that such trends in the past have all ended very badly. The problem is history also shows that bull spikes can run a heck-u-va long way in a very short time before such extreme bullish sentiment gets punished. The run-up to end January has the potential to be quite explosive and quite exciting, so buckle up, lads, and get ready for some volatility as the bulls and bears play investment chicken while poised on the edge of a massive investment precipice. Our 50% exposure to the uptrend should enable us to profit on any melt-up action, while keeping the volatility of the ultimate top and reversal tolerable.
401K investors should have ˝ of their portfolio invested in a stock index, or aggressive growth, mutual fund, with the other ˝ remaining in a money market fund.
The Index portfolio is ˝ invested in QQQQ with the other ˝ remaining in cash.
Kevin Wilde, Chief Trading Strategist AlphaKing.com.
