Which is exactly what you want to see when things are all right in the world. If the S&P 500 or Dow is leading, it tells me the market wants less risky plays, which is never a great thing. Good to see after a slow start this morning, the Nasdaq rise to the top of the hill and lead the way higher in front of Apple Inc. (AAPL) report this evening. It was interesting to watch how no one was afraid of being in this report. It was only down slightly during the day,

Whenever it sold off harder some buyers came in. With the Nasdaq leading the way, it made the move up in this index more impressive. After all, how many times will AAPL be red and yet have this sector leading. Shows you the underlying strength of this market. Very impressive overall. As the market closed we were right near the highs. More solid action in this prolonged but impressive bull market that never seems to want to spend too much time pulling back. A strong day for the bulls.

After hours, most of the news is bad yet the futures are rocking up. Why? AAPL!! Yahoo! Inc. (YHOO) is down. Cree Inc. (CREE) is down. Juniper Networks, Inc. (JNPR) is down. Some of these in a pretty big way. However, AAPL is up and thus the weighting of this beast is helping the market maintain a bid higher after hours. The Nasdaq leading of course because this is where AAPL lives. YHOO down 3%. JNPR down 7% and CREE, a leader, down 6%. Huge loses yet all it takes is for AAPL to be good and the futures are up.

Amazing really, but not great if the advance-decline line is poor tomorrow yet the markets are up. That'll have to be watched closely. Bottom line is the market is AAPL it seems and they blew the cover off the ball and thus it's just exploding and carrying the trade in to tomorrow for the broader market. Don't overdo too much because AAPL is good.

I want to go over the dangers of holding in to earnings. Yes, AAPL is wonderful tonight. If you held it in to earnings you are celebrating.

However, most stocks are down significantly tonight on earnings. YHOO down 3% wouldn't feel good. it would feel to be down 6% on CREE and 7% on JNPR and many are. It really is akin to playing Russian roulette. Why take the chance. You can blow huge gains you have worked so hard for in a moments flash. I get so many emails from folks saying now what do I do. The answer is, next time please avoid the reports or at least trim your holdings by 50% or more to take away some of the risk involved. Greed kills in this game.
The one constant about this market has been the very solid internals in this rally throughout. The advance decline line has been wonderful. Up/down volume has been great as well. Volume has been average but that's all you need. There is a major misconception that all rallies need constant volume. Not true at all. Volume is critical only at points of inflection. When you're breaking out or breaking down. When you're blowing through wedges, etc.

The market has given the volume when it's been important. High volume every day is actually bad. It shows too many buyers and will blow out all the bulls available in a very short period of time. Average volume is just fine. The bears or those who have missed this party would like you to believe that this rally is nonsense. Missing out or losing lots of money as the market rises can bring about those emotional responses. It's all fine. Hey, what's already taken place can't be taken back. From here I still see nothing in the internals suggesting anything bad. yes, we need a more sustained pause/refresher but nothing is bad here. The internals have been solid throughout.

We have to watch tomorrow closely for signs that the rally is getting frothy in that if only a few stocks carry the day, meaning a poor advance-decline line, which will be a red flag. With more bad reports tonight than good, tomorrow will be a very interesting tells for the shorter-term. I will watch closely to see how wide the participation is. How many key groups are participating and more importantly, we have to watch to see if we get a gap and fade tomorrow as we get back to possibly getting overbought. It's still not a time to get aggressive. It is time to do as we have. It's time to have scratch in the game as always in a bull market. Aggressive play makes little sense.

Peace,

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

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