Overbought & Option Expiry @ play.....

50 DMA was clearly identified as resistance level for the markets......

Nasdaq the-strongest index made it over 50 DMA with great ease...while S&P 500 & Dow were scared of the heights......

There is a raging debate about the status of this market.....

History is good & bad when looking @ any market status.......

History is good because...it tells you exactly where we have been & where we are currently in historical perspective......

BUT....

If you bank too much in historical snapshot...it will prevent you from looking @ FUTURE....too much REARVIEW focus??

So history is BAD...because it does NOT tell you where we are heading NEXT......

So where are we heading next?????

First we need to rectify current overbought conditions......by hitting recent highs & pulling back many times.....

Washington will give us SPURT of good news driven buying ....but it will not make any meaningful new HIGHS for the time being.....

We need to mark time...to digest overbought conditions.....

I see sideways/down sloping markets for about two weeks....

I definitely see a very strong April......which MAY be second monthly advance if we end March with first monthly gain..hopefully....

Option Expiry is always questionable @ best..MM along with Hedge Funds in total control down to the last cent???? SEC does NOT look into these things????

So.....

While the market deals with overbought conditions...keep checking RSI range on a 1 year chart..there is sectors of markets which are oversold......like Bulk Dry shipping,Ag,Solar to name a few.....

It will be prudent to stay away from overbought sectors like Semiconductors,Financials as they need time to rebuild strength.....

Please pay attention to PE on FY 2010..as it is more close to reality than 09.....

Here are PE of some sample stocks which I either own or am monitoring:

GNK.......3.83
RIMM.....11.48
AAPL......17.25
IPI.........5.53
AGU.......5.14
TSL.......3.94

If you can buy all of the above in a diversified portfolio..you have a very good CHANCE of creating a positive history for your portfolio going forward......

So.....moral of the story is KNOW what you are buying & when you are buying INSTEAD of worrying about markets 24/7....

Markets will do what it needs to do...but great BARGAIN disappear in no time......

Do NOT allow bargains to slip away?????

BLOG does NOT give buy or sell.

Saleem