Happy 2nd Birthday Mr. Bull and since your birth on 3/9/09 we've had a terrific run with stock indexes such as the Dow, and the S&P double their values. This bull market was so strong that when compared to historical bull markets, is the strongest % gainers since the 30s (depression bounce, e.g. a bounce from $1 to $5 is a 400% gain. Happy Birthday Mr. Bull even though the entire rally during 09 was considered a counter trend rally and self proclaimed stock market geniuses advised to stay out. And finally in early May 2010, the bull market was welcomed and ordinary folks started to get back in the market, which of course prompted the flash crash. The stock market, post flash crash, once again became the land where no one returned alive until the bull market came roaring back in September of 2010. The rally that started September 2010 lasted until...well...now. The last week stock market price action has resembled consolidation, a big fancy term for (its moving sideways), which is usually followed by either a strong continuation of the previous trend (roaring bulls), or a reversal (ROAR ITS BEAR TIME). An interesting note is that the general market is losing momentum, which is indicative of a reversal. The Action Plan: We wait and look for a breakout to the upside or a breakdown to the downside in the current consolidation pattern, and position accordingly.
Remember do not just blindly listen to the guys on TV when they say the market has done very well and its time to believe the rally because its 2 years old and here to stay. When you listen to them, buy stocks and the market goes down 15%, they'll go back on TV and say, "The market has had a great run and this is a 'healthy correction'."
The investing world simplified.