What I am seeing from the market indices and leading stocks is constructive action, indicative of a market heading higher. In my last two blogs, “Stocks Look Like They Want to Go Higher” and “NYSE Short Interest at a Five-Year High,” I pointed to clear institutional accumulation and favorable short interest as signs of strength in the market. Both of those facts continue to weigh favorably for this uptrend. After three strong days up on the NASDAQ, these tight ranges and closes are a sign that institutions are willing to step in and buy the excess supply caused by any short-term profit-taking. Meanwhile, NYSE short interest remains in high ground.

If you are looking to increase your percent invested, there are some stocks that are still in buy range, but many stocks that broke out earlier in the month are already extended. Buying right is still paramount so you can be positioned properly for the inevitable pullbacks. I hope you were all able to get positioned in time, because if you don’t own any stock now, you are probably late. The external noise (the news of the day) can be daunting, so remember to block all of that out and focus on your charts. The charts are telling us to be in.

Best Returns,

Scott O’Neil

President, MarketSmith

Follow Scott O'Neil at Twitter.com/WScottOneil