The Herd Is Cautiously Optimistic

It was a roller coaster ride for the vast majority of the day until the bulls put the hammer down in the final hour causing the short sellers to crawl back into their bear caves.

The market tone has been improving as investors begin to feel better about nearly everything. Strong economic data combined with a smooth transition to Bernanke along with relatively quiet newswires has created the mindset that not all is bad in the world. While reasonable skepticism still reigns, this market is moved by perception and emotion.

So, can the bulls keep the pressure on? My gut says you have to give them the slight benefit of the doubt in the short-term, even though I don't like admit it. I still think they are on truly shaky ground, but Mr. Market could care less what I have to say about the matter. What matters more is what the herd thinks and believes and for the time being, they are feeling cautiously optimistic. Next week they may "feel" different which is why navigating this tape with such inconsistency is quite a challenge.

Tomorrow is options expiration and, if you've been reading this website for longer than a few weeks, you know the drill - I don't trade on option expiration. While I won't be taking the day off, I will be working on various tasks (including improvements to the members' only website) over the next few days. With options expiration Friday and the market holiday on Monday, there is a good window of opportunity to get some of the items on my to-do list crossed off.

As always, I hope this finds you well and prosperous. Have a great evening.