Ready for a Pullback..

8 am EST The action yesterday was very strong but the market is still very risky. I heard one pundit put it this way this morning, "It took the Dow 75 years to go from 4 to 14,000 and it took a little over one year to lose half of it." Now that we are up 21% in the last 13 days, it is time to proceed with caution. We are seeing some serious window dressing from the fund managers out there going into the end of the quarter. There are a lot of people out there with a lot of money to manage who got caught with too little exposure to equities. The true test of the rally is going to be after the quarter ends. If we don't see a large sell off after March 31st, you can probably have some faith in the rally as a longer-term bottom.

The trade in Newell Rubbermaid (NWL) was a huge winner yesterday. We had the capitulation sell off on Wednesday and then the recovery started Thursday. It was good for a quick 10% gain. I think it can go higher. The stock is sitting close to some near term resistance. If it can break strongly above the $7.00 - $7.10 area with good volume, there is slight resistance at about $8.50 and then nothing until about $10.00. If you bought in the morning yesterday and sell at around $10. You are looking at a 50+% gain. That is pretty good money in a volatile market. I will be putting my stop at break even this morning. I love risk free trades. Stay cautious in this market, and until next time, stay low risk..