Yellen has opened the spigot for bulls

What a few days can change the investors’ mood from extremely depressing to quite euphoric now! As I said last week when the marketed dropped down for a few days and got the market rather depressed, it was clearly very much oversold. I suggested to buy, buy, buy. Of course, I know not many people would have the nerve to do so when there was panic and blood in the streets. You can count on me to take the advantage to aggressively buy. When the market is in this kind of depressing mood and being extremely oversold, you basically can buy almost everything for short-term to expect some quick profits. That’s exactly what I did that I bought not only individual stocks such as ABBV, INTC, MSFT, PM etc, I also bought SSO and XIV for the broad market. Well, it was a great call and move for me. Just in a few days, all of them have gone up significantly. Although such an oversold trading will likely be successful regardless with enough time, I have to thanks the Fed Chairwoman Yellen, as she is clearly a catalyst for triggering the change of the mood so powerfully and imminently. Without her, the current euphoria and rally might need more time to materialize.
So where the market will go from here? Well I think this bull run has more legs in it. Actually even after such a strong bounce back in the past 2-3 days, S&P is still nowhere near the overbought territory. We are also entering one of the most bullish seasons of the year. As a whole, I think the market will continue to go up at least till end of April. How high it can go? S&P will first get over its all time high at 2119 and will then challenge the next resistance around 2130. I will monitor these 2 important levels first before assessing whether S&P can go even higher. Of course, it won’t be a straight up even in a bull run and a lot of fluctuations will occur in between. Since I have so many short trading positions entered last week, I’m trimming a bit to take some chips off the table. I don’t want to be too complacent and greedy by expecting to get every penny. So I have sold some of my XIV positions to partially lock in my profits. For my other trading positions, I will likely close some of them in the next few sessions based on their technical setup when short-term overbought shows up. It is very likely the market will become too euphoric again. This is the time you want to take profits when the market makes you and everyone feel happy. As a rule of thumb for trading, don’t try to catch the exact top before taking profits. No one has a crystal ball and knows that in advance.