Ride 'Em Cowboy! 11-7-05

Good Afternoon.

The stock market did a classic little shake and dance this morning further throwing weak Bulls out into the gutter. The stronger hands used the dip to their advantage and have steadily marched the market higher all day long. Semiconductors and Small Caps are acting well and are not getting too far ahead of themselves. If you pear under the covers you will notice continuous skepticism with every move higher in most stocks acting well. Nothing could be more beautiful.

Many people missed this move and are kicking themselves so hard in the rear that they have Nike written on both cheeks. Some people are imprinted with Ferragamo but we won't get into that. Remember, we have been warning our readers that the dips will be shallow and quick. The urge to sell knowing that the market has run quite a bit recently is building. Everyone knows the market is getting overbought so isn't it logical to take some off of the table? The answer is, "yes, it's logical", but whoever applies logic to making money in the stock market is truly unwise.

The fact that the market is overbought is exactly the reason it will become even more overbought. The fundamentals underlying this market are so stealthy and strong that by the time traders capitulate to the concept that the market will forever stay overbought is when it will finally relieve its pressure all over their shoes. Just to make it worse, the pullback that relieves pressure will have the odor of asparagus…now that's disgusting...sorry. At that point in time the hatred and disgust levels will border on violence. Therein will lie another wonderful two to three day dip that will need to be aggressively bought.

However, we fully expect that the stock market will soon put in a string of up days that will be unparalleled to anything we've seen in 2005. Traders must always remember that the market wants you off of its back as its going higher, even when you know it is. The greatest of Bulls will be thrown from the horse's back many times.

Yee Haww!!

This will be our one and only post today due to meetings with new clients. See you tomorrow.

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