The market continues to impress, with the major indexes rallying persistently since mid-December, and especially during the past three or four weeks. More important to us, many individual stocks have begun to lift-off, and on big volume to boot. That’s a clear sign that big investors are stepping up to the plate, something that was missing for the last eight months of 2011.

That said, we wouldn’t say it’s a raging bull market at this point. While it’s true that almost no recent breakouts have failed outright, there also haven’t been too many that have exploded higher. Don’t get us wrong; we like what we see. Our point is that, with the major indexes back to the top of their 2011 range, and with most stocks either just having broke free on the upside, or still building bases, it’s not like anyone has missed the boat.

In the short-term, yes, it’s possible the market is getting to a point where a pause or pullback will come. But, if this really is the kick-off to a new bull move, our experience is that the first correction or consolidation of a new bull move is usually relatively well contained, and the real leaders of the advance tend to correct time-wise (they chop around and go sideways for two or three weeks) instead of pricewise (a deep 20% correction or something of the sort).  

You shouldn’t chase stocks that are up 10 days in a row, but you also shouldn’t obsess over finding the perfect buy point if the stock has shown excellent volume clues and price action. And, on the sell side, while booking a few partial profits is fine, we advise giving your strongest performers a chance to continue higher in the weeks ahead.