Nobody ever went broke sitting on cash. There was a monster short squeeze on Wednesday as a result of better economics and strong earnings from multiple companies.
The major indexes rebounded to levels of strong resistance and exactly where they failed before. This all occurred in the first 30 min of trading as the short squeeze powered stocks higher. After the first 30 min of trading there were no further gains. There was a small dip in the afternoon but the diehards were forced to cover into the close and kept the indexes at their morning highs.
After the close on Wednesday Apple reported blowout earnings as expected and had nothing material to say about supply chain issues out of Japan. They said they could not make iPads fast enough and sales numbers were lower than analysts had expected for that product. However, Apple kept any facts under wraps and the stock rallied more than $10 in after hours.
The Apple earnings have spiked the S&P futures another +7 points but they are starting to weaken slightly late tonight. Regardless of how they end up on Thursday morning I don't think we want to be rushing into the market. If they recover and go on to produce yet another short squeeze higher at the open then any put premiums would be instantly deflated. If resistance holds and the market begins to roll over ahead of the three-day weekend then we would be in trouble. If futures do weaken tonight after the big Wednesday gain then I would be concerned traders were bailing at resistance and the market is on the verge of rolling over.
Basically, we are at a pivotal point for the market. It is sitting at its highs for the year and there are only two trading days before the FOMC meeting and press conference. Earnings have been great for the most part and fund managers already know how this cycle will end and the rally to the highs for the year would be a good place to exit before the "sell in May and go away" crowd.
I believe in putting money at risk only when there is a better than 50:50 chance of being profitable. I do not think we can know that for sure tonight. Waiting another day or two before entering a play is always preferable to rushing in and then getting stopped out.
No plays for Thursday.