Risk On! - 07/27/10

While market participants want to buy high (and higher), I would be more disciplined.

While I was out on Monday, the U.S. stock market's recovery continued apace.

Bears/shorts are trapped, and bulls are emboldened in a one-way market importantly influenced by high-frequency strategies and algorithms that accentuate the trend (in either direction).

Having said that, and as I have written, there remains enough ambiguity to the duration and depth of the current domestic soft patch and with the emergence of a number of nontraditional headwinds, the upside to the expected second-half trading range is swiftly appearing in sight (with the S&P 500 around 1,150).

Ironically, many of those that most objected to my yearly low call just three short weeks ago are now market devotees. And, of course, the Divine Ms. M.'s opening missive spells out that the oscillator is becoming overbought again.

While market participants want to buy high (and higher), I would be more disciplined.

Enough said ... and don't chase strength.