Managing the Melt-Up and Questionable Timing
January 9th, 2006 by BWV
We are having another outstanding day here, solidly higher from positions in NDSN, ENG, PAY, etc. Of my 29 longs, 24 are up and 5 down. This is getting to the point that I’m doing “so well” that a 100% liquidation has crosssed my mind several times this morning.
The problem with that thought is we are in pure melt-up mode. So many folks are looking for this market to pull back that it will likely frustrate them and continue to scale the wall of worry. Mix in some performance anxiety among big fund managers, and you have very sturdy support behind this move. Rev preaches that these moves nearly always go farther than seems reasonable.
“It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.” - William O’Neil
However, counting the big upside reversal in the first session of the year, this is the 5th day up. It feels like walking a highwire, but I’m trying very hard to resist hitting my sell buttons prematurely. I’m going to do a few partial sells (primarily to make me fell better) and tighten up stops on other positions. Any new buys will be in stocks with range contraction pullbacks, not the more extended charts.
Tomorrow is my last day of work before a 1600 mile road trip out to Jackson Hole, WY with my Dad and our dogs.
Going to visit my brother the pro skier and spend time with family & friends.. and of course enjoy the ski mountain’s unusually huge level of snow. Save some powder for me, bro.
It will take enough discipline just to stay on top of the market and continue my asset management business startup.. so my posts here will be sporadic at best.
Hope you’ve had a nice start to the year.
90% invested long
