There is no disputing the fact markets are in a bullish trend right now. Since the election there has been few corrective days, and that seems to disturb some people. Investors prefer to wait for those dips to buy, but that was require superior timing and execution. Some are very good at this skill, and using technical analysis gives one a leg up on this timing - especially when the signs point to an overbought condition.
As a technician, I look at many different indicators that can give me a good read on future direction. It's not a guaranteed system, but what out there is? We just try and stack as much evidence together to make a compelling case. Some of the best indicators include the MACD, price oscillators, stochastics, momentum, volume indicators and other mechanical types.
But all the indicators out there are trumped by the biggest one of all - price action. Lately, we have noted some improved price action yet some of the indicators had started to fall off the bullish side. Hence, it was far too premature to take a bearish stance, though the evidence was mounting. The price action stayed steady, and with this week's rally that lifted all the other indicators to the bullish side of the ledger.
If you chose to short or play bearish those gains were few and far between. Fact is, a bull trend makes it very difficult to swim against the tide. Of course, the same could be said for a bearish move. A trend can last far longer than you could imagine and often turns when you least expect it. But trying to fight the trend can be a miserable and painful experience.
While many would like to see the markets correct, they will eventually be right. Markets actually DO come down and give opportunities to buy stocks at lower prices. Until then, pay attention to that price action, it will steer you down the right path.