The major indexes tacked on impressive gains today and volume was the heaviest we have seen all week. The gains came despite weak Cisco (CSCO) earnings last night, which continues to reaffirm the fact that bad news has been priced into this market and the ‘has-been’ laggards aren’t dampening the spirits of those that want to own stocks.

The move today seemed concentrated in larger companies and with the volume increase leads us to believe the institutions are finally caving to the performance anxiety that has been building. Reversals in stocks like, market leader Google (GOOG), indicate that funds feel they must own these winners as we come into the close for the year.

Unfortunately breadth lagged a bit and the stocks we favor didn’t seem to have as much momentum as the indices would indicate. Institutions tend to go for the bigger cap names first and then eventually move into the small stocks that we prefer. We suspect as the market picture continues to improve, our stocks will follow suit as traders and investors will search for new names and will soon discover what we already know about some of these stocks.

We put quite a bit of capital to work today in names that have been acting well or have seen light pullbacks as we suspect the emotion to continue. After some slight consolidation, many stocks are once again offering attractive entries. As we have written about numerous times, it seems as if those who are feeling left behind are now scurrying to put capital to work creating this boost. While we enjoy it, it will be very important going forward to monitor your positions carefully in order to recognize when solid gains turn into greedy returns. Enjoy the run but don’t forget to take some profits along the way.

Have a good evening.

RevShark