I did a lot of soul-searching this weekend, as I considered what the balance of this year might hold and what changes 2010 might bring. I may be a bear at heart, but I've got eyes, and when my long positions are almost all in the green, and my short positions keep getting stopped out, it does occur to me that the bulls may be ending this year with a flourish.
Earlier today, I sought to balance things out with a large position in UWM (the ultra-bull on Russell 2000) and USO (crude oil). As dismissive as I've been of the inverted H&S pattern on several indices – like the Dow 30 – maybe this pattern merits attention after all. It's a sloppy pattern, yes, but if we keep this kind of strength up (take note we're at a new yearly high on the Dow today), all the resistance levels are going to fall away, and it seems an easy climb to the next 11,250 threshold.
The past nine months have been sensational for the bulls, and it would be no surprise if they'd want to wrap up 2009 with gusto. I'd rather not get completely trampled in such a scenario, so besides the large bullish positions I mentioned at the top, last week I accumulated a smattering of smaller long positions, which I reviewed in my video a couple of days ago.
And I'm not saying this because today is some kind of blow-out on the Dow; as I'm typing this, it's only up 33 points. But a new high is a new high, and it simply makes it that much more likely that whatever resistance is in place right now will be swept aside.
