Looks like the market’s enthusiasm from yesterday has been reigned in a little today. Indices are slightly in the red (save the NASDAQ 100) as investors weigh what’s likely to be coming next … following what ended up being an 11% rally over the prior five trading days. You know where I stand; I’d rather pay a small price now - and prove the market is stronger than it was a month ago - in order to acheve something bigger down the road. To do that, the market needs to give up a respectable amount of ground (enough to close Monday’s gap from the index ETFs), and then fully recover on the way to higher highs. It’s a step back, but a necessary evil.

But when has rational thinking ever gotten in the way of a rally or selloff? If the market wants to unbridle its enthusiasm, I can’t stand in its way. My caution is the same though … the stronger the move, the stronger the reversal.

Nevertheless, our trade is the beneficiary of the move higher.

You may recall back on Thursday morning before the market opened we issued a trade suggestion for the SSOs - the 2x leveraged ProShares Ultra S&P 500 Index ETF. With an opening price of 22.70 that day compared to the current price of 27.07, we’re up about 19% (talk about falling in love with leverage).

You’ll also recall we were basing our target and stops not on the SSOs themselves, but on the S&P 500’s chart; the exchange-traded are surprisingly more volatile than their index counterparts, so the adjustment is prudent. Our target level for the S&P 500 is 957, and our stop level is 790. That just means when-and-if the index hits one of those lines, we’re going to make an exit on our ETF. So far, barring any major reversal, it looks like we’ll be locking in a nice gain. Stay tuned on that front.

As we all know by now though, the early and mid-day action means little compared to the last hour of the trading day, where the bulk of all the recent moves have been made. Check in later - let’s see if the bulls can keep the pace going. I have my doubts because I’m inherently skeptical, but I also acknowledged that “this time it’s different”. With this rally, volume and persistence - the two key ingredients - have been measurably better than previous-but-hollow surges.

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