Bullish surprise...

We have to admit, even for a bull, Wednesday's rally was a bit overwhelming.      Many traders just aren't prepared for such a move given Tuesday's not so impressive finish and the constant giveth and taketh attitude of the market intraday.     It of course,  all started with a better than expected retail sales number that helped ignite the good sentiment.   On the contrary, many retail stocks actually closed relatively flat today.   It was pretty much a broad rally where even the beaten down techs like AAPL RIMM and GOOG all had a good close.    The one group that didn't participate is the Agri/Chem.   We have noticed that this bunch looked a little toppy recently, but we are still surprised that the extreme market bullishness did not help the chemicals/agri at all.   All in all, we hope we had you prepared for the possibilities leading into the day.  This included the idea FSLR would beat handily, the Ag's-Chem's possible reaction to AGU EPS and the dip on the Coals to take advantage of possibly.

As the Dow took out Tuesday's high..12400, traders just rushed in with more buying.    We are actually getting closer to the previous resistance of 12800 heading into options expiration.     One thing we have to give to this particular market environment is that every major move is done in such a relatively short time.    It literally goes its own way without traders preparing for a proper trading strategy.     Basically, we have to either chase up a bullish move or sell short on down tick in order to maximize a play.     Does it sound scary?   It actually is.     If you are feeling you've been under performing this market, either when it's going up or going down,  you are not the only one.   You almost have to guess the trend and get in before a move happens to take advantage.  This of course also relates to some sector plays as we saw yesterday, it is impossible to prosper as we'd all like because the stocks in the group are up 10% by 930am on light volume before you had your first cup of coffee.   As much as we are flexible in trading, we just can't simply put on both the bear and bull outfits at the same time on any stock, group or the whole market.      Right now, as we inch closer to the previous resistance in such a short time, the risk/reward to go long at this point isn't that favourable.    If we were to assault 12800 meaningfully and hope to take it out, we better consolidate the next little while before such an attempt.     We are eyeing 12400 now as a short term support and hope to see some consolidation back and forth for the next little while.    At the same time, we are keeping our eyes on any economic development and the situation with the financial sector.

Now some plays...

Solars, it started with FSLR and ends with it.    We are talking about this sector run here.   We recall that FSLR did the exact same thing with its last quarterly report and basically lit a fire across the entire group.   This time though, we think we all should exercise some caution because we have been getting mixed earning reports from some key solar players.    We'll take today as a good and solid solar day but we have to be smart to take profit in this environment when given the chance.

Coals, this group had some very good action and most of our recent mentions have done well.   We like this group because buying the weakness usually rewards.

Shippers, this group has also done some major upside move just the past few days and allows to flip in and out some during the day.   We do want to caution that the run up is pretty extended at this point and if it looks that way to you, it probably is getting close to a pullback.   We'd be inclined to buy on pullback though due to the recent interest in this group with the BDI climbing seemingly every day now.

Let's see if the market continues to shell out the luv on V-day!  This depends if Bernanke's testimony doesn't include "MISREMEMBERED" something as Roger Clemens testimony did;).  If it does this market will take a flogging like Ace did.