Worldwide markets are trying to overcome "European challenges" & looking beyond abyss.....
Fear was injected "big time" by media overplaying Europe issues......
European debt is no different than many countries around the world faces every year....
Hedge funds have benefited by shorting the market in a relentless manner "wiping out" many retail traders especially those who rely in "option trading".......
Institutions are waiting for "dust to settle" before putting money to work.....
We had two months of straight selling..wiping out margin investors/traders/institutions as daily margin calls played havoc into all portfolio.......
By Wed of past week ..we finally had all the sellers out of the game.....some sitting in 100% cash or having "high cash position in their account"
Markets were so oversold that it attracted "strategic buyers" in the past week....these are the traders & institutions who could buy with conviction....
Conviction is very important in this stage of the market...headlines will continue to be negative & will be played up by CNBC......
CNBC is becoming a mouthpiece for shorts & negative commentary.....
CNBC thinks that everyone is a daytrader & pushes this agenda.....
Serious money is always made when news is terrible & sentiments are @ its worst.....
Currently, contrary indicators are giving the biggest "buy signal".....Put premium are @ its peak as everyone is hedged...sure sign of market bottom when Fear/protection is in vogue.....
Many stocks are showing "relative strength" by moving UP fast or are "near 52 wk HIGH"
@ this stage "buying strength" will be rewarding NOT "bargain hunting".....buy fewer stocks but buy stronger stocks based on TAPE......
I am @ my highest exposure since March of 09...95% invested.....
"Action speaks LOUDER than words"
Here is my $/sector allocation as of Friday's close :
SNDK 26.67% Tech/Flash & Nand memory
CNQ. 19.67% Oil & Gas producer
LVS. 15.15% Casino operator
CRUS 14.60% Tech/Chip maker
TCK. 12.68% Copper,Coal mining
SOLF 8.18% Solar fully integrated
PIR. 3.07% Retail
As you can see that, I am highly diversified ...which is the best way when markets are coming off bottom.....I see "relative strength" in my entire portfolio & is positioned to "optimize $ invested" means biggest bang for the buck is the focus......some sexy names "may NOT go UP in % terms"
Hopefully, you are positioned to take advantage of "rampant fear"which brings better prices in strong stocks......even in this option expiry week.....
BLOG does NOT give buy or sell.
Saleem
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