Biggest winner so far!

Up 40% since the entry!

Update: PLCE

PLCE met the target, nearly 9% in 7 trading days.

Break out!

Today the market break out! Just did not expect so soon. Now we have to hold the gain, otherwise it would be a bull trap that is very unfriendly. The bank sector also breaks out, bullish so far.

We are still resting

Now a week has passed, the market is still rest just under the resistance. Can we break out? I still don't know. But here are some positives and negatives for you to think over, you may be a better judge.

First the positives, as usual.

1. More stocks came around and formed a breakout pattern, either cup and handle or bull flag.

2. The already broke out stocks have kept the gain very well, namely as AKAM, FFIV, CMG, VMW, NFLX etc.

3. The recent economic numbers are much better than expectations.

4. China's stock market bounced back after a brief decline.

The negatives:

1. The sentiment has flipped to bullish too fast. The AAII bullish number has grown to 44%.

2. High CPCI number indicates big boys are betting upside is limited. I borrowed the chart from Cobra and attached down below.

Now the neutral factors:

1. The bank sector has been lagging, but now came around a bit. The semiconductor sector has just disappeared entirely in this recently, but the good news is Taiwan is about to break up, which is the manufacturing base of most of semiconductor companies.

My best guess is maybe we rally a little further, but upside is limited since the sentiment and the lack of leadership from the bank and the technology. What do you think?

Concern

China stock market has been down for two days, which could put some selling pressure on US market. Just a head up.

Stopped out of gold

Gold was stopped out with a loss. I will revisit them once the gold returns to its resistance.

The leading sectors just resting

The leading sectors are taking couple of days off that is normal and nothing to be worried about.

Banks are catching up

If the bank sector could break this trend line, it would be super bullish for this market. Bottom line is, as long as banks stop going down, the bull market is alive.

Rally is upon us

More stocks are breaking out or ready to break out; leaders like CMG, VMW, FFIV, AKAM, PCLN etc held well yesterday facing profit taking; China stock market is strong; our weak bank sector is catching up, all signal we will see more upside from here.

It is moving, finally!

RDWR is finally moving!

Update: SOL

SOL reached the price target today, 18% in 6 days!

Update: SOLF

I closed SOLF as well, 11% in 4 days!

Update:SPRD

I also closed SPRD, 23% in 5 days, not too bad.

Update: PNRA

I closed the position on Friday. Easy money has been made.

Pour a little cold water to bulls

I borrow a chart from http://slopeofhope.com/. What it tells me is unless we are breaking above the area with red arrows, it is a bear market rally. As a trader, we have to keep it in mind. Don't let the optimism fool you.

The following sectors look well

They are the leading sectors.

They have to move sooner if we want a breakout

Both the semicondutor and the bank sector are sitting at lower end of trading range. I would be encouraged to see they are leading the rally out of the range.

Can we continue the breakout?

Good question. Honestly I don't know. Here are some thoughts about the recent rally off the low. First, the positives, as always.

1. The economic number is much better than the expectation. I think the double dip scenario is already priced in and now better numbers have put a nice cushion underneath.
2. Many stocks broke out.
3. The weekly charts on the major indices look much healthier than the last week.

Now negatives:

1. Many stocks approached the resistance quickly, so do the major indices.
2. The semiconductor and the bank sector are lagging, which is not good.

And the neutral factor is the sentiment, which happened to be a major contributor to the recent rally. I am not sure how many investors have turned bullish after this rally and we will find out soon. If not many believe in this rally, it would give another vote to the positives and we may have a better chance to break out of this huge trading range.

Now it seems we will go up to the upper band of the range and come back to wait and see if the economy is really improving. So I would still be optimistic, but cautiously.

SOL

SOL also acted well, I am about to take profit.

SOLF

SOLF is approaching resistance quickly after I recommended yesterday.