Industrial Production disappoints, the market still gaps up

The market was set on a path yesterday to bounce, and as I mentioned last night, "Watch how the market reacts to news", the market more or less shrugged off the report.

Initial Claims were in line.

CPI increased which is not good for the bulls who want a QE3.

All in all, it wasn't a strong bullish day for news, yet the market still gapped up. This tells me that the locals still are exerting control over the market, it hasn't spun out of control. They set things in motion yesterday and despite some weak news, they kept them in motion.

This is good news for us as we can now add short positions into strength. Make sure you are shorting stocks that are solidly bearish and even better, in establishes downtrends. Now's not the time to guess whether a stock has topped, look for stocks that have topped. I provide several ideas every day and will continue to.

As I mentioned, since the downside volatility was so impressive, don't panic if you see similar bullish activity in a bounce, that's the nature of the market. When in doubt, look at the longer term charts and keep your eye on the trend. Daily gyrations can be enough to spook you out of a good position and that's what they are meant to do, understand that is the local's game plan and that should help take some emotion and fear out of your choices.