When I think back to my last bout of profit taking I think about the market that made a very impressive comeback. Impressive enough that last night I make my shopping list for the next morning. When I get in at the opening, I do so with market orders. When I want in, I want in, and I don't want to fool around trying to shave a few pennies. Extracting the last fraction belongs to slow-moving markets, which is the last thing this market is.

But when the good news is great news, keep watch. Are hot cyclical issues like machinery, metals, and papers making significant gains after many months in the rat-hole? Is this the beginning of market broadening and new leadership? If so, it will be great news for the market. If it's just a flash in the pan, then the Bull has to live off the billions that are still pouring in. Track how much new money is coming in per day or per week. Yes indeed, money makes the heart grow fonder.

Aside from watching the ever-important money flow, we must keep a close eye on the earnings reports when they start coming in. That will show the direction and strength of this market after the rush of new money subsides. If the Bull is still running and snorting, and has a way to go - then stay with it. But be watchful for the unexpected. When things are too good, that's when something could come out of left field to spoil the party. Stay tuned.

The Market Pro

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