Now that we HAVE entered bear market.....It is important to trade/invest keeping a tight trading range for trading decisions.....
RSI is a very important indicator for a safe strategy......as it can pinpoint short term range ...
Making money will be very difficult unless you follow a disciplined approach....
Here is some range to keep in mind as we struggle through this market......
Dow had a range of 3173 points from 52 week high of 14280 to a recent low of 11106.70....
RSI had a range of 82 to 20 area...where we are NOW
After a drubbing of 3173 Dow points a drop of 22.2% & RSI @ 20 which IS the lowest of the year..there IS every reason to expect "a technical/oversold bounce"......
Now the question IS...how many Dow points this bounce MAY last.......
Strong Rally have lasted 1200 points....but lately the bounce is 600 to 800 points....
Most Strong rallies ended when RSI hit 70 area......so this IS more reliable than Dow points..Recently rallies are FADING NEAR 40 RSI.....
So for me 40 RSI is where I will liquidate all my positions...currently RSI is @ 25.67...
So .....based on my calculation Dow has a potential upside of 500 to 700 points from recent low....then another RETEST of LOW......
Bear markets are very tough to predict.....because we do not know ...where the LOW is ...10,000 area is a "real possibility"........
For traders.....it is extremely profitable to play the RSI range.......based on your trading talent...if just long...then get out and reenter.....if both long & short then do opposite @ each end......
For buy & hold investors with long term view......keep accumulating @ near low level..as $ cost average will be lower.......
Sectors to focus on will be select Techs,Pharmaceuticals,Bio techs....based on what I am observing lately.......
Currently I have AAPL & SOL .....
My $ allocation is :
AAPL 65.10%
SOL 34.90%
It has NOT been easy for most people since May 19 as Dow has plunged from 13,136.69 to current 11,288.54 a drop of 1848.15 in 45 calender days ...a 14% drop......
So...Plan your OWN strategy carefully as we are NOT out of this "down trending markets"....
BLOG does NOT give buy or sell.
Saleem
6 comments:
Hey SALEEM
How has your morale been with the crappy market???
I gotta belive that we are headed higher but for how long and how high is the question!
Your analysis of the market is excellent and I sent ya some stuff on AAPL which is a MED term hold IMHO.
SOL is mystery to me as to why it is falling in price , with the price oil climbing, solar should soar higher.
Hmmm
Peace to all
M
Hi Saleem,
Great wisdom on the markets. The Media here are fanning the flames of fear saying we are entering another great depression. Most of the writer's too young to have yet experienced a recession first hand. ha! Not much new here in ATL. Always busy, traffic has increased. One restaurant is packed, another empty. Don't understand SOL movement....could be shorts?
Hi Madmax,
Thanks for your appreciative note.
There is no mystery on wall street...when they take the whole market DOWN.....nothing IS sacred.
Technical bounce is overdue !!!!
Saleem
Hi Standards,
Once we accept the reality of bear market...then rest is easy.....
I see bear market lasting till Jan 2009.....
Tight trading range will be the order of the day......
Money CAN be made in bear market if you time your trade quickly.....
So...range trading is IN & buy & hold strategy has to understand that we are STUCK till Jan 2009 !!!
Unless oil cracks...recession is INEVITABLE !!!
Saleem
IBD 100 listing
Rank Company Symbol Price High
---- ---- ---- ---- ----
1 CONTINENTAL RES INC CLR 66.44 -12.7
2 G M X RESOURCES INC GMXR 76.37 -13
3 POTASH CORP SASKATCHEWAN POT 210.89 -12.7
4 GRAHAM CORP GHM 69.55 -10.7
5 TITAN MACHINERY INC TITN 25.24 -26.8
6 BUCYRUS INTERNATIONAL BUCY 63.82 -19.7
7 C F INDUSTRIES HOLDINGS CF 142.4 -17.7
8 SOUTHWESTERN ENERGY CO SWN 45.04 -14.5
9 T THREE ENERGY SERVICES TTES 71.48 -15.7
10 ENERSYS ENS 31.49 -16.5
11 HESS CORP HES 119.54 -12.7
12 MOSAIC COMPANY MOS 132.29 -19
13 ARENA RESOURCES INC ARD 48.32 -16.1
14 DENBURY RESOURCES INC DNR 33.19 -17.7
15 MASTERCARD INC CL A MA 253.74 -20.8
16 ATWOOD OCEANICS INC ATW 115.07 -9.3
17 NATIONAL OILWELL VARCO NOV 85.12 -8.2
18 SWIFT ENERGY CO SFY 61.87 -9.7
19 NATURAL GAS SERVICES GRP NGS 28.13 -14.7
20 AGRIUM INC AGU 97 -14.8
21 BAYTEX ENERGY TRUST BTE 31.98 -9.2
22 INTEGRAL SYSTEMS INC ISYS 37.63 -11.4
23 F M C TECHNOLOGIES INC FTI 72.25 -13.1
24 PETROQUEST ENERGY INC PQ 24.58 -15.8
25 ST MARY LAND & EXLORATN SM 58.55 -10.7
26 CENTRAL EUROPEAN DIST CP CEDC 71.45 -5.3
27 ROBBINS & MYERS INC RBN 45.66 -10.1
28 WHITING PETROLEUM CORP WLL 103.25 -8.2
29 AMERICAN PUBLIC EDUC INC APEI 41.98 -10.6
30 PRIDE INTERNATIONAL INC PDE 43.34 -11.3
31 MURPHY OIL CORP MUR 94.76 -6.6
32 NOBLE ENERGY INC NBL 93.21 -11.3
33 RANGE RESOURCES CORP RRC 63.64 -17.2
34 QUICKSILVER RESOURCES KWK 35.6 -20.9
35 BERRY PETROLEUM CO CL A BRY 55.11 -11.3
36 FLOWSERVE CORP FLS 114.65 -18.3
37 JINPAN INTERNATIONAL LTD JST 33.16 -26.3
38 VENOCO INC VQ 21.55 -11.6
39 ALMOST FAMILY INC AFAM 25.93 -5.1
40 CLEAN HARBORS INC CLHB 70.51 -9.4
41 APACHE CORP APA 133.19 -10.8
42 ENCANA CORP ECA 88.91 -10.5
43 BADGER METER INC BMI 51.5 -6.4
44 ARCH COAL INC ACI 63.7 -17.7
45 BAIDU.COM INC ADS BIDU 316 -26.4
46 RESEARCH IN MOTION LTD RIMM 115.04 -22.3
47 CELGENE CORP CELG 67.37 -10.7
48 PLEXUS CORP PLXS 27.99 -13.8
49 GRAFTECH INTERNATIONAL GTI 22.95 -18
50 YAMANA GOLD INC AUY 15.9 -20.2
51 OLIN CORP OLN 24.68 -11.7
52 MONOLITHIC POWER SYSTEMS MPWR 22.89 -16.8
53 ANSYS INC ANSS 41.66 -16.5
54 NOBLE CORP NE 61.65 -10.6
55 WESTERN DIGITAL CORP WDC 33.28 -16.8
56 OCCIDENTAL PETROLEUM OXY 87.25 -12.8
57 GARDNER DENVER INC GDI 48.96 -15.4
58 PERMIAN BASIN RTY TR UBI PBT 23.92 -14
59 WEATHERFORD INTL LTD WFT 44.21 -11.5
60 COMPASS MINERALS INTL CMP 71.19 -19
61 CHART INDUSTRIES INC GTLS 49.2 -5.8
62 CIMAREX ENERGY CO XEC 64.71 -13.1
63 SOHU.COM INC SOHU 73.45 -19.7
64 PETROLEO BRAS SA PTR ADR PBR 65.72 -15.3
65 PETROLEO BRAS CL A ADR PBRA 53.64 -17.3
66 W & T OFFSHORE INC WTI 53.31 -11.1
67 FLIR SYSTEMS INC FLIR 42.3 -4.9
68 PENN VIRGINIA CORP PVA 72.36 -10.7
69 CYBERSOURCE CORPORATION CYBS 15.48 -24.1
70 WILLIAMS COMPANIES WMB 37.8 -7.2
71 TRANSOCEAN INC RIG 142.91 -12.3
72 CORE LABORATORIES NV CLB 134.84 -13.3
73 NATUS MEDICAL INC BABY 21.85 -2.5
74 MONSANTO CO MON 120.21 -17.6
75 C S X CORP CSX 57.36 -18.9
76 ATHEROS COMMUNICATIONS ATHR 31.21 -12.8
77 WOODWARD GOVERNOR CO WGOV 34.9 -18.4
78 NETLOGIC MICROSYSTEMS NETL 33.91 -15.8
79 URBAN OUTFITTERS INC URBN 31.03 -12.3
80 GORMAN-RUPP CO GRC 37.2 -18
81 CAMERON INTL CORP CAM 52.97 -9.5
82 E O G RESOURCES INC EOG 120.71 -16.8
83 AEROPOSTALE INC ARO 31.04 -13.8
84 HORNBECK OFFSHORE SVCS HOS 50.15 -15.6
85 NEXEN INC NXY 37.42 -12.4
86 NORDSON CORP NDSN 66.96 -13.4
87 STANLEY INC SXE 33.09 -14.1
88 ENSCO INTERNATIONAL INC ESV 74.44 -10.6
89 CANADIAN NATURAL RES LTD CNQ 95.73 -12.4
90 DEVON ENERGY CORP DVN 117.85 -7.5
91 SUPERIOR ENERGY SVCS SPN 51.05 -11.6
92 GULF ISLAND FABRICATION GIFI 45.71 -13.1
93 HALLIBURTON COMPANY HAL 50.55 -8.7
94 AXSYS TECHNOLOGIES INC AXYS 50.7 -20.6
95 FOREST OIL CORP FST 72.92 -12.3
Hi Madmax,
Thanks for posting IBD 100.
Saleem
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