New Highs…Confidence …all of the above on the stock market. Trend followers should buy new highs. High can go higher. The complete opposite of trying to buy the low and be smart. Buying new highs or all time highs takes a different mindset. However, it probably best to take emotions out of the trade and systematize your trading. This is exactly how I trade. Method…no emotion…I am very skeptical of this old age bull market…however I know I do not know the future.
Yesterday, the market spent most of the session in slightly positive territory, doing a good job of holding on to the gains of the last two days. Selling in the last half hour erased those small gains and the major averages closed about unchanged. One day is meaningless…rather noise.Leading stocks were a bit higher on the session with the leaders index gaining .14% on extremely low volume. The index closed in the upper half of its trading range, a good sign. What is a major Red Flag is the complete lack of breadth in this market. We have just a handful of stocks accounting for all the gains in the index. Amazon…Facebook …etc…It reminds me of the Nifty stocks in the 1973 crash. This stocks could not go down. They were the retirement of stock market investors at that time. Pension funds loved them as well as the mutual funds at that time…Then BOOM!
Anything can happen….What I found very interesting was looking at the ProShares Short VIX Short-Term Futures ETF. This is trend following!