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Bullish, But Nervous

Friday's push higher has done nothing to ease the nerves we've been feeling for the past week.  The fact that the markets are rallying based on hope the Fed is going to come to the rescue isn't helping matters any.  If we had our druthers the markets would be rallying on hard data, not on speculation.  What is also a bit unsettling is the fact that long term sentiment levels are closing in on overly bullish extremes.  We liked the market's chances better a few weeks ago when doom and gloom was in the air.  Now that retail investors are getting excited it's tempting to pull our head back inside the shell.

Nevertheless, momentum is on the side of the bulls here and despite the fact that leadership was getting whacked early last week, many of the big name stocks recovered.

It's probably fair to guess that the Dow will be back at 11,200 soon, which is where the real test begins.  So, not to be a party pooper, we will do our best to milk this thing until the source runs dry, but for today at least, we will also stay hedged because individual names are still vulnerable here.