The market continues to show amazing strength this year. It's kind of a delimma when we reach levels in the market that seem extended from a historical perspective. One tries to protect gains and tighten up stops - only to get shook out on what ends up being a buying opportunity dip. On the other hand you run the risk of losing more gains when the market does decide to take a dive; even if it is only a few percentage points in the market - where you would re-enter stocks which remain in a bull market.
Lots of traders are starting to take profits on shorter time frames and capitalize on the small gains as they present themselves. In hindsight, i have found that if i would have just hung in there a little longer on most of my positions i would be much better off right now. I can look back at some of the stocks i got stopped out of or took early profits on and it makes me sick to my stomach to see how the performance would still be paying off if i would just continue to hold them. Not every stock falls into this type scenario, but knowing where to draw the line on risk management is the key to letting the winners run and cutting the losers. Easier said than done. I continue to tighten up my stops as they move higher, but am learning to give them a little bit of wiggle room.
Many good stocks are currently up against resistance on the underside of recent highs and demonstrate how quickly they want to regain their recent highs. Other stocks are oversold at short term support and may appear to be "buys" at this point. Maybe they are, or maybe they will be in the dead cat bounce catergory - depending on how the market behaves.
As for the broad market, its anyone's guess what will happen. If you go with the trend and consider the market sentiment, you get long and stay long. Even Jim Cramer went from bull to bear to back to bull in the course of a week and a half as of late.
I'll throw a chart of the S&P daily up, but not that the support lines i have on there mean anything in this market. Best advice i could give anyone out there in traderland right now is to stick to your trading plan, remain disciplined and have a great day!