We can make the bull or bear case based on specific information.  When sentiment is sour, momentum turns lower, volatility rises and the media starts making the case for downside – well, the public responds in kind.  Likewise, when stocks rise sharply, volume rises and volatility collapses we see investors pouring money into stocks.

Yet, what we need to consider at all times is the price action.  Price is the king when it comes to examining the market structure.  When price is rising and new highs are achieved, there is no resistance and buyers continue to pile in.  We often see ‘assets chasing price’, when those who are not trusting of the action suddenly pile in late.

This past week saw tremendous price action, yet not many believers.  Volume was suspect, as is usually the case when markets climb from a bottom.  Most are often late to get on board, waiting for confirmation.  There is nothing wrong with this approach, but it takes patience.  But pay attention to the price action at all times. It will put you on the right side of the market – price is truth.