There's Always a Reason to Justify Buying

This is starting to become a habit. The Bears demonstrated as much follow through as Massachusetts did with the Big Dig (no offense to people who like to Paaak their Caaas). The Bulls wasted no time in the closing hour pouring into the market setting new four year closing highs. The breadth turned up nicely to close at almost 2:1 positive and the volume was okay at 1.7billion shares. Importantly, the new highs versus new lows showed slight improvement. This is an internal measurement that we have been concerned with lately and frankly still are.

As the week progresses towards the day of Tryptophane…the chemical in turkey that makes you sleepy…we wonder when this market will ever rest. Our gut tells us that as long as the absolute performance levels on the major averages are still paltry, players still feel that a bargain is at hand. Remember the market is overbought however; it can remain so longer than seems reasonable.

If You Held a Taser to Our Head:
Your friendly neighborhood Kcap Team has been over 100% invested for most of this ride. However, we have some rented exposure in ETF's that we are looking to jettison when the internals show negative divergence to the major averages. Until then NASDAQ 2300 is starting to come within sight and no longer seems like a pipe dream for 2005.

Hope you did well.

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