It has been a strong two weeks for the equities market. Thanks to some positive news from the nation’s banking sector, the average investor is wealthier this week than he was last week. Is it time to lock in the gains?

It is hard to be a hater this week. As I told TFN Strategic Trader subscribers a couple of hours ago, the banks are at the helm. Their earnings reports and latest health assessments are driving the markets.

You may be jealous of the average $800,000 salary over at Goldman Sachs (NYSE:GS) or the billion dollar profits recorded at companies recently saved with the tax money pulled out of your paycheck every two weeks, but it is impossible to deny investors are little wealthier this week because of the money made by the nation’s banking industry.

For the most part, the equities market has been on the rise over the past month thanks to the surprisingly upbeat reports from the nation’s top investors and lenders. Goldman started the trend and just about every other firm since has reinforced it.

Today, it is American Express (NYSE:AXP) doing the heavy lifting and preventing the markets from selling off going into the weekend.

On sentence from the company’s CEO, Ken Chenault, sums it up best:

“Although it is still too early to point to any sure signs of an economic recovery, the number of cardmembers who are falling behind in their payments, the volume of bankruptcy filings and the level of loan write-offs were better than we had expected.”

It is nearly the same sentiment from every bank reporting over the past couple of weeks.

For investors smart enough to keep on investing while the markets sagged, Wall Street’s recent attempt to fix its mistakes is paying off handsomely.

In fact, if you followed my advice and took advantage of one of those free picks we are always boasting about, you are sitting on profits of about 20% thanks to Discover’s (NYSE:DFS) recent surge above the $12 level.

Time to sell?

After the recent running of the bulls, lots of investors have a nervous finger on the sell button.

In fact, I got some pressure (I won’t name the source) earlier in the week to unload the Discover position and lock in gains of just over 10%.

I didn’t cave and the move paid off. Here’s why:

Remember all of that money sitting on the sidelines last spring? As the markets collapsed last fall, just about everybody reduced their exposure to the equities markets. Bond prices soared as investors went nuts protecting their wealth.

With the first real glimpse of economic recovery not seen until last week, much of that money remains on the sidelines. Folks still have their unopened 401(k) statements scattered across their desk reminding them of the recent pain.

But as more and more positive news hits the Street, those investors will follow the money and increase their appetite for risk once again.

As huge amounts of money return to the equity world, demand will outstrip supply, forcing prices higher. Just think of it as the opposite of a run on a bank. As the fear subsides, the greed will take over.

With that, I say we let our gains ride. Let the “new” money push the markets even higher before we make our move.

Even with the Dow above 9,000, the top is much further away than the bottom. There is plenty of room left for the bulls to run.

Source: Cowboy Up: How Long Can We Stay On?