Markets have been building a base around current levels since the week of Sep 14 when we reached 1080.15 in S&P 500......Friday on Nov the 13th we closed @ 1093.48.....so in 60 days we have gone NOWHERE......or on a closing basis a move of only 13.33 points in 60 days.....
It looks like that we will break on the UPSIDE......
So how far can we go in this breakout......most pundits think that we will stall @ 1120 in S&P 500 & a quick pullback to 1070 AGAIN.......???
RSI numbers are as follows:
Dow 63.13
S&P 500 58.73
Nasdaq 59.39
As we all have observed lately that 70 RSI is a sell zone..which should happen AGAIN in this RUNUP to new 09 highs.......
Market have a tendency to surprise our trading ranges be it RSI or 1120 resistance...but to take a chance above 70 RSI or 1120 in S&P 500 may not be wise......
I have every intention to monitor the TAPE around/near those numbers and MAY exit many positions.......
Option Expiry is also this Friday...which MAY stall the rally......MM controls strike price with PRECISION.....
BUT...there ARE opportunities to make "serious" money......Solar, Bulk Dry Shipping,Gold,Silver & even Oil may be a very attractive areas.......
Solar stocks have turned the corner with many stocks "breaking out" either to new HIGHS or RESISTANCE...new trading range is being established.......
As I have highlighted many times that it IS a stock pickers market..so go where the strength is...TAPE monitoring is the key......
Do NOT be biased towards your OWN favourite sectors/stocks...go strictly with TAPE strength...this market will be tough to navigate IF you are "telling the market what to do or what markets should be doing"...it has NOT worked since March......
Pullbacks have been a great "buying opportunity".....most stocks are "technically healthy & breaking out".......do NOT have outdated ideas as to what prices should be on any pullbacks...it IS a market which IS trending UP..so stocks are finding "higher trading range".....it IS TAPE 101...
Many traders are afraid of this market and are waiting for an imminent COLLAPSE......it is NOT happening so ACCEPT the "verdict of this market"...
I know Doug Kass,Carter Worth,Bob Prechter,David Rosenberg...NEVER thought that this market will even reach 1,000...BUT FACTS are very CLEAR even to a 3 year old..but these adults are busy talking this market down on a daily basis..some are even using silly metaphors like "this market is whistling past a graveyard"...YES they ARE whistling past their graveyard thesis where their short positions are buried DEEP......
So my thesis remains.... that this IS an uptrending market which will remain in a trading range which will be higher than previous pullbacks......RSI is a buy @ 50 area & sell @ 70 area....to be in a safe mode......
Here is my $ allocation as of Friday close :( My $ allocation which was 50% has grown in equity by 75% in the last two weeks because of my "hyper trading approach")..or in other words I am @ my highest equity level for 09 with only 50% dollars in the market.....this also proves that you do not need to put too much money to trade better...it is the STRATEGY which is more important than the amount of money being allocated.......NOW i am getting ready to pull some more money out of the market.....
AUY 9.83% Gold producer
CSIQ 14.30% Solar fully integrated
TSL 15.35% Solar fully integrated
EXPE 9.16% Online travel booking site
MRVL 12.20% Technology PC/Smartphone
POT 19.86% Ag Potash producer
GNK 19.30% Bulk Dry Shipper
As you can see that I am well diversified with overweight in Solar sector....
Good luck with your allocation & trading strategy.
BLOG does NOT give buy or sell.
Saleem
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