Stocks gained for the fourth straight day in a row. Can we make it five?

To say the least, everyone is starting to feel a whole lot more comfortable about the economy and that sentiment isn't being driving just on the rising stock market. There is a general sense out there that the soft patch created by higher energy prices, hurricanes, inflation, or pick your favorite calamity haven't put the brakes on the economy just quite yet.

Yes, overall growth is slower, but we're still not in a recession. Couple that with expectations for another 4Q performance-driven rally after a miserable October for the hedge fun jocks and the rails have been well-greased. So, when times are this good, I usually ask myself what could go wrong. Not that I'm a pessimist, but no matter what the market does, I'm always figuring out a plan B.

Plan B obviously includes the failure of the rally we've seen, or simply what is more likely if current trends remain intact - more sideways movement to finish out the year. If I had to place my bet, I probably would put money on the latter instead of the former. Of course, this rally could also get legs for a little longer as long as folks think the rally train is leaving the station. We may be overbought, but we're not severely overbought. At least not as much as we were severely oversold just a few weeks ago.

Emotion rules the market over the next two months more than any time of the year. So, there is no rule that logic will play a role near-term. Use that to your advantage. Have a great evening!