Many market players were ready for a sell-the-news reaction to the monthly jobs report and the completion of the Greek bond offering. In both cases, the news was well anticipated. But that didn't matter, and the buyers just kept coming.
Volume was the lightest of the year and we softened slightly as the day progressed, but the underlying support that has served this market so well for so long showed few signs of relenting.
I suspect we have too many folks hoping for a little softness. The top-calling bears had a taste of success Tuesday, and they are anxious for more. The underinvested bulls never really seem to have much of a chance to buy weakness.
We are back in a very familiar position where the market is extended on light volume and in need of a rest, but it refuses to pull back. We had the classic V-shaped bounce again this week, and we are doing exactly what we have done before and continue to levitate back to highs. Those who thought a bounce would quickly fail are feeding the market beast.
I'm tired of writing it, but the key lesson is not to fight the strength but to wait for actual weakness if you are anxious to sell. The fact that volume is light and there isn't much upside momentum doesn't mean that the short side is going to work.
Next week brings the Federal Open Market Committee's interest rate decision, which means we are going to have lots of talk about quantitative easing again. The bear argument is easy: With the better economic news, the chances of more quantitative easing have declined and that is a market negative. If we reverse, that is likely going to be the reason, but this market is happy to ignore negative arguments.
Have a good evening. I'll see you on Monday.
_______
More from James "Rev Shark" DePorre: