Good Monday to you. The markets are off to a great start this week bucking all of the recent economic data, mixed earnings results, concerns over Europe and a decision from the Fed to stand pat for now. Although on a short-term basis we've been among those who were pretty convinced we'd see a sharp move lower before this market would find solid footing and start moving higher, it appears our analysis of the longer-term charts of late is proving the underlying strength is for real. Advertisement Free, Instant Stock Analysis Is your favorite stock ready to boom or bust? Enter ANY stock symbol for a free, complete technical analysis from INO.com. This report will be delivered to you instantly and will share trend strength and direction for short-term, intermediate-term and long-term timeframes. Click here and enter a stock symbol or company name for a free analysis. Advertisement We mentioned Friday we needed the NASDAQ Composite to follow suit with the S&P, DOW and NDX to confirm the bulls have won the short-term war. Today, the Composite is flirting again with that key resistance level we’ve been talking about for weeks. As I type, the COMP has nudged itself slightly above its July 5th high, which bodes very well for the overall bullish picture. However, until we convincingly break above the April highs, there still exists the possibility this market could be range bound in the coming weeks and months ahead. It's really too soon to tell whether the major indexes are going to simply break out and stage a rally for another new leg up, or simply stall and start working their way back to key resistance levels. So how do you play the indexes going forward or position yourself to take advantage of a potential new leg up in the market? First, even though many investors are likely going to start running out and snapping up their favorite ideas, we suggest you slowly add your favorite ideas to your long-term portfolios on weaker days in the market, or logical pullbacks. There's no need get overly exuberant, as we suspect there will likely continue to be a fair amount of volatility in the short-term until the markets convincingly break above their April highs. Once we move well above those April highs, there's a high likelihood the volatility will subside. However, until that happens, your likely going to get short-term pullbacks you can work with to position yourself accordingly. For index option traders, getting long the options on pullbacks and selling out of them on the run-ups is likely going to be the best strategy. Since there does appear to be some underlying strength, it's probably not worth getting short the major indexes until we get a little more clarity for where things are headed. As for individual ideas, it's still very much a stock picking environment. Tomorrow, we'll have a look at how small caps have been fairing compared to their larger brethren. For now, at least on a short-term basis, I can almost assure you the highs from April are going to get tested in fairly short order across all of the major indexes now. And, for investors who have had the intestinal fortitude to hang in there over the last few months, you just may be well rewarded in the coming months ahead. What is This Climbing of Worry We Speak Of? Over the last couple of months, this market has managed to defy a lot of negative sentiment and speculation ever since bottoming out back in early June. It's a classic case of "Wall Street Climbing a Wall of Worry." I'm sure many of you have heard the expression at some point in your investing or trading careers, but for those of you who aren't sure what we're referring to here, it's pretty simple. Some of the most successful and sustained market run-ups in history have been coined this phrase, and what it means is while retail investors and even most professionals see no logical fundamental reasons for the markets to move higher based on what's going on right now, they do. In other words, while everyone is worried, the markets move higher. It's an interesting dynamic that I can really only attribute to a few key reasons. First, it's important to remember Wall Street needs to make money. It doesn't matter what kind of market environment we're in, they need to make money. So, while everyone out there is being overly cautious or outright bearish, they're taking in what everyone else is selling in an effort to take the markets higher and slowly unwind those purchases at higher levels. That's profit for them, and their big clients. This can go on for weeks, months and even years. It's a big reason why we love technicals so much because charts don't care about the current economic environment or lagging economic data, they move how they move and that's that. Secondly, and probably the biggest reason for this phenomenon, is that the markets trade well in advance of what they likely see happening well down the road. Many investors think the markets react to every bit of economic data and news that comes out on a daily basis, but in our opinion, that's just not the case. On a short-term basis maybe so, but on a weekly and monthly basis when it's all said and done, the markets are trading at least three to six months in advance of what the smartest people on the Street think is going to happen further down the road. So, while everyone is running around screaming the sky is falling and selling due to a media driven doom and gloom scenario, the smartest economists in the private sector are telling their clients to be buying because things are going to be better down the road than they are right now. How many times have you or someone you know sold their stock/s at their lowest point, only to have it move higher for weeks, months or even years. Wall Street loves to shake the tree, rotate weak hands right out of their holdings before staging a sustained march up the charts. You've got to know the rules and understand the game if you're going to make money in the markets. That's why it's so important to be buying logical lows and sell into logical highs. Why? That's what the smartest people on the Street are doing year in and year out. For long-term investors, logical lows and logical highs can take place in the span of years vs. days. For the new crop of investors who come into the markets on new highs thinking the market always goes up, I feel for them because they're going to learn the hard way. If you're new to investing and are young enough to start planning for the long haul, now is an excellent time to be building positions for the future because economies of scale, as well as individual stocks, ebb and flow. That's what makes a market and you have to be savvy enough to know that the one constant in the equity markets is that things are going to change. They always do. If you have a different explanation for this highly speculative phenomenon, we'd love to hear about it.