Like I said last week, a chart as sexy as this one was always likely to move higher. If you want a textbook example of technical analysis in action, take a look at the recent Amazon chart. After rising by almost 50% since its earnings report, the stock settled into a trading range ($60-$64).

Traders could seek to get in on the action by either buying at the bottom of the range or by buying on a breakout of the range. Last week, I did the former and sold half near the top of the range. This week, I did the latter, adding to my position once the stock blew past $64.

It was obvious that a ton of momentum traders had this one on their list as the stock never looked back thereafter. I took partial profits near the closing bell. The day-trade alone netted me 1,500. Since initiating the trade, profits have exceeded 5,000. Mamma Mia, I'm one happy monkey when I think about that.

Amazon is up 15% or so over the past few weeks. That's great, but it's not the reason that this trade was such a big winner. I'm in the money because I was able to take a large position without taking on undue risk.

I bought the stock near $60. The fact that the stock had such solid support here meant that I was able to place a tight stop loss order (under $59). If, on the other hand, circumstances dictated that $55 would be a more prudent place to place my stop, I'd have had to take a smaller position.

Since beginning this column, I've had bigger winners in percentage terms. The beauty with this trade is that the set-up allowed me to take a bigger position.

I'm not boasting or being a bore here. Newbie traders look for big winners and think in percentage terms when they'd be better off looking for set-ups like the above.

Other traders understand that tight stop loss orders offer big opportunities but they become too aggressive and keep getting stopped out. Sometimes, a stock merits a loose stop. Other times, a tighter approach is better. It depends on the recent price action.

Anyway, the Amazon trade was a beauty. The stock made it as high as $73 on Wednesday before selling off in the afternoon to close at $69. I've moved my stop up to the $64 area, thereby protecting some of my profits whilst giving the stock more room to move. If it continues to move upwards, I'll move my stop with it.

My only other current position is the long position in the Dow initiated a fortnight ago. This has been another pretty trade although the market sell-off on Wednesday afternoon showed that some traders are getting nervy.

The catalyst for the sell-off was a warning from former Fed chairman Alan Greenspan that there's going to be a "dramatic contraction" in Chinese equities and that the current Chinese bull market is unsustainable.

Wow, that's news to me . . . not.

Any eejit can tell that the Chinese market is bubblicious at the moment. The Shanghai index is up almost 60% this year. Stocks are trading at nearly 50 times earnings.

Grannies are taking tips from their astrologers as to what's heading north.

The Wall Street Journal reports of "folksy trading tips such as those now circulating among investors advising people to wear red clothes, which are representative of a 'hot' market and to eat beef to sustain the 'bull' run while avoiding references to 'dad, ' since the word in Chinese is a homonym for 'drop'." It's nuts and will surely end in tears, although God knows when . . . bubbles always last longer than expected.

Anyway, the fact that the market sold off on Greenspan's oh-soobvious warning reflects underlying nervousness as to the speed of the recent market up-move, especially at a time of deteriorating fundamentals. One of the reasons that markets have been rising over the past 10 months has been the expectation of an imminent interest rate cut.

Bears joke that the best thing for the market would be if the Fed never cut rates again, thereby allowing it to rise steadily on expectations of an imminent cut that never comes. Still, it's not for me to rationalise such matters. At the moment, the trend is up and the dips are being bought.

The level of shares being shorted has reached record levels again this month. At some stage, these shares will have to be bought back, creating yet more buying pressure. The general public are not taking part in the recent rally. My guess is that we will not top until Joe Soap succumbs and starts buying stocks again. Until then, higher prices are more likely than lower prices.

It's better to look at what the market is doing rather than what you think it should be doing. A trading acquaintance has been telling me that Amazon is way overvalued. He's equally convinced that the market as a whole is heading for meltdown.

Maybe he's right, I don't know. I'm not smart enough to figure out this stuff (he's not either, but he thinks he is).

I don't know if the Dow is headed for 14,000 or 12,000. The former seems more likely to me, but I could be wrong. If I am, my stop loss order will tell me. If my stop isn't hit, I'll stay in the trade. Ditto with Amazon.

As for me, 50,000 is the next target. After months of drear and sideways movement and a seemingly endless struggle at the 40,000 level, things have come seriously good over the last fortnight.

Here's to more of the same.

Weekly gain/loss: + 3,500 Overall balance: 45,700