IS market sentiment too euphoric ?

European stress test results came in better than expected....instead of ten failure ..we have seven.....

Traders are relieved that European Banks are better than feared.......

Will this CHANGE cause a blowoff rally ???

Everything IS possible......

SO..it is PRUDENT to have exposure in any rally.....how much exposure is based on individual comfort level.....

Why am I reducing exposure ?

Because I am NEVER sure about REACTION to any news......sometimes it is "SELL the news" sometimes it is "BUY the news"....

Monday's CLOSE will tell us ..what is the verdict.....

Indices are sitting @ a crossroad......

S&P 500 is 11 points away from 200 DMA...... only indice NOT above 200 DMA.....

IF S&P 500 can close well above 200 DMA..then technical picture will be much much better....

It is extremely hard to predict market direction most of the time.....

Europe reaction to stress test will be the key with LIBOR rate.....

My personal take on market sometimes are "anticipatory" & act accordingly......

I am NOT right all the time..SO my action should not be interpreted as a direction for the market....

I DO change my mind based on TAPE....never fight the TAPE........

TAPE has been "highly volatile"...so ensure your strategy IS working......

Summer is never a great time for a "sustained rally"..more like a "trading range rally"

Q4 is EXPECTED to be a good time for the markets......

By start of Q4..we will KNOW how US economy is actually doing......

We have nine more weeks of "gyrating data" to sift through.... to get a real handle of worldwide GDP growth.....

Canadian Central Bank has just turned "more cautious and are predicting sluggish growth" for Canadian economy in 2012 to the tune of 2%+....

Canada is showing relatively BETTER performance compared to US..BUT the indicators are softening lately in Canada also.....

SO...it is important to "monitor economic signals".....which IS currently pointing "south" based on Bernanke latest testimony and Fed is ready to act AGAIN to give boost to US economy.......

What markets do in the short term is controlled by High Frequency Traders.....

IF..you can match HFT speed then go ahead & participate in whatever direction they take the market.......

BUT...i will stay NIMBLE to the tune of max 50% exposure until there is more CLARITY in the economic trendlines......

SO...I will trade in & out based on TAPE or "anticipatory actions" on my part......

It is extremely important for all of you to have your OWN take on market & direction.....

Personally .....I am "neutral" @ best in my enthusiasm.......

We are all WRONG most of the time as markets are quite capable of doing the impossible...going UP when nobody expects and also going DOWN when everyone is EUPHORIC.....

It is hard to tell where we are NOW in markets.......

BLOG does NOT give buy or sell.

Saleem