I really like this guy Rev. Shark, especially when he says nice things! ...

Things are slowly winding down, and although it has been a slightly negative week, the good news is that we are setting up very nicely for some upside next week. As I scroll through my screens I'm seeing a lot of basing action that can provide a nice launching pad for higher prices. The market and many individual stocks badly needed to consolidate recent gains, and that is what happened this week.

I believe there is a very good chance that the Nasdaq makes new highs some time next week. It would probably be better if we continued to consolidate for a while longer, but I suspect that buyers are not going to be very patient if the market continues to hold up well.

I'm going to be busy this weekend working on my buy list. The key to moving fast when things come together is to know in advance what you plan to do. If you know that, you are three steps ahead of the crowd.

Rev. Shark says it so nicely I will just quote him directly

The market is perking up nicely. Breadth is improving and the Nasdaq 100 Unit Trust has a particularly bullish-looking pattern intraday. I suspect there may be some buying interest there due to the rebalancing that I mentioned earlier.

I'm not sure what impact that will have, but the fact that Google is likely to be added is intriguing. Google looks like it would be about the third-largest weighting in the index and may help generate some additional volatility.

A couple of readers asked me about the old adage I mentioned earlier, "Don't short a dull market." When market action is slow and not much is going on, there can be some surprising bursts of strength, as traders make buys out of boredom and then others jump in as they notice the action.

Market participants lean much more to the long side, so when things are slow and they are looking for something to do they are more likely to buy than sell. That at makes it dangerous to put on shorts. We are seeing a fairly good example of that right now.

Don't overplay your hand

When the trailing stop has been hit and the profits booked, do not rush to reinitiate the same trade again. Move on to the next scenario. Do not overplay your hand.

The market has stabilized and is rebounding from its intraday lows.

Be very careful when chasing a market that has gone too far

The market lifted very nicely off the morning highs but at mid day, the rally sputtered and caught the bulls by surprise. Those who chased strength are now left holding the bag. This is what happens when the market is extended and has had neither time nor price on its side to work off the almost-continuous 5 week rally.