Crystal ball gazing is a good thing when it comes to S&P 500.......
S&P 500 is back @ where it was in Oct 08......
In October of 08 we had PLUNGED from 1576.09 in Oct 07...so 12 months of relentless selling gave us a chilling plunge of 565.61 points in S&P 500 or a steep loss of 35.89%...but we proceeded to lose another 343.69 points or another 34.01%.......so peak 1576.09 to trough 666.79 a horrendous drop of 909.30 points or 57.69%.......
BUT all that is history...the biggest bear market since depression.....once in 70+ years phenomenon.......
NOW...we are in reverse mode...
& it will be no less spectacular than anything we have seen since last depression....
1300 area is the only logical resistance ...IF you look @ 1 year chart......
So there is a very good chance that we climb the wall of worry to 1300 against all odds.....
You may ask what are the odds.....a nagging fear that economic recovery MAY fail.....which is prompting MANY to be underweight stock market and are parked in money market/treasury bills......
It is very evident that underweight in stocks are prompting a SUSTAINED UP move in markets......as buyers step IN on any pullback.......
1300 in S&P 500 MAY come by year-end with minor pullbacks along the way.......as we have seen recently range of pullbacks have been in 2% to 9% range...so be READY for that all the time..
The problem with these minor indices pullbacks.... is that there are much larger pullback in individual stocks..sometimes DOUBLE of indices which SHAKES your confidence in staying put.....
I was expecting a pullback of 7% last week BUT we got only 2% on Nasdaq.....which has all been erased......
While Nasdaq pulled back S&P 500 & Dow outperformed & barely budged from their highs...this CONTRARY tape forced me back in a hurry....
It is extremely IMPORTANT to follow TAPE and react quickly to make money......
I have learned over the years to "never fight the TAPE" & do follow its trend...sometimes in a hurry by monitoring resistance/support...
It is OK to be proven WRONG by TAPE...BUT it is NOT OK to resist TAPE...so CHANGE your mind QUICKLY...which I always DO......
Sometimes TAPE CAN mislead you in selling quickly...BUT if you are locking profit in that process nothing is lost..even when you are WRONG for 2 days......
Nobody CAN predict how high market will go in a short time span or how low it will go in a short span.....BUT TREND CAN be spotted based on sentiment in media.....CONTRARY trend is working these days...the more SKEPTIC pundits ARE...HIGHER we go.......
Now the question IS ....how I am positioning in this market?
As you all KNOW that I monitor RSI for most of my trading decision......
I have a phobia of NOT staying when RSI hit 70 in stocks generally speaking...when I have NOT followed this..I have suffered loss..so always REGROUP with RSI in FOCUS......
Here is the RSI on *my holdings & other strong stocks:
*POT...53.77
*SOL...51.46
*RIMM.56.79
AAPL..75.37
AGU...67.43
TSL...56.00
CSIQ..71.72
BIDU..60.97
FUQI..66.34
GS....59.73
GE....76.43
BAC..75.00
C.....72.49
GOOG65.70
MA..78.88
When I do analyze all these RSI numbers..I AM forced to think..That I should revise my formulae & NOT be concerned about high RSI...GIVEN the market condition..which IS in major UPTREND.....
So here IS my new RSI learning based on Market conditions......
So never stop adjusting to the "new realities"
To make money in markets one needs to be flexible.
BLOG does NOT give buy or sell.
Saleem
8 comments:
NICE blog today
Gosh your optimistic --hurray
I like the RSI for SU, 58 and an point and figure target of $51
I like APPLE more than RIMM but apple is so expensive now Besides I got a lot left over form last yard price of $185 which at the time seemed cheep for apple stock.
But the market can be a crap shoot at times.
RIMM may be a shooting star but Fast MOney did not like RIMM? they are a contrary play?
Cheers to you all
Best regards to all
Hi Madmax,
Thanks for your feedback.
SU has been featured today for a "breakout"....by a leading technical outfit..I get their free newsletter.
About AAPL...last 2 trade I made last year was profitable...I actually Sold @ $200 last time....
AAPL will do well going forward but risk/reward is extremely compelling in RIMM.....
I personally believe that RIMM is having a "blowout" Q with its new TOUR & CURVE which is flying off .....
Sometimes the easiest money is made when most traders are out of that stock......
My RIMM exposure is the 2nd highest ever......it is only 42.46% of my portfolio..highest % of my portfolio ever........
Hope i do not sound "too overconfident"
Saleem
SALEEM
YOU are one savey trader
YOU are never over confident! Practical and youi cut your losess
faster than any one I know.
You are so right in most of your decisions--I guess I wish I had your conviction.
Best regards to all
Hi Madmax,
Thanks for your take in my trading style.
It is all about surviving in the market to fight the next battle.
I always play my hunch...IF I am proven wrong...I move ON.....
I respect TAPE..so have to accept its verdict !!!!
Good luck today !!!!!
Saleem
Saleem
It seems that RIMM and GS are in free fall
Gosh, what happend to those two, what is happening I have not seen any negative news either!
I would like to get some more of either but they are falling down.
thoughts
Hi Madmax,
RIMM was downgraded to neutral with a target reduction from $90 to $88...by UBS.....
Great buying opportunity $$$$
GS ..I do not follow!!!!
Saleem
Hi Saleem,
I think RIMM is a buy, but it may be headed lower. Dang, I had it in my sights at 63 and missed out! Don't like these mystery downgrades of only a few dollars to drop the stock price. A drop into the 60's is a buy to me. Later this year it should smell like roses. :)
Best Regards
Hi Standards,
Downgrades are good as it gets oversold in a hurry.....
Sometimes one can catch the bottom if they are lucky...but it is impossible to predict bottom on any stock.....
If I like business trend of any company like RIMM..I do not mind buying @ a level where I feel comfortable..which differs from trader to trader....
Yes..RIMM can go lower.....if selling continues.....
Obviously I am not happy with another sharply down day for RIMM....
Saleem
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