RSI was hitting below 30 last week which is a defined buy point BUT retail investors were selling in droves.....individual investors sentiment index hit the lowest point since June 09... they were
57% in Bear camp as of last Thursdays tabulation......
Market always does the opposite of sentiment...so..we rocketed UP 5%+ best showing in a shortened week in a year.....
S&P 500 is only 22.34 points from 50 DMA & only 33.62 from 200 DMA......we should be able to go above those numbers.....
This is Option Expiry week.....there is a strong possibility that we close near high of the week by Friday......
WHY..am i so optimistic when everybody is so scared of this market...because pessimism brings the "biggest opportunity".....
Market has been fed lot of "negative talk by CNBC"....remember "head & shoulders" "death cross" & "double dip".......Talk of "negative TRIFECTA" which was being orchestrated as "triple sell,sell,sell"
Let us take the most popular theory championed by Dr Doom of "double dip"......
Only last week IMF whose job is to closely monitor world economies NOT go on CNBC daily.....came up with the following numbers on GDP ....
US 2010 +3.25%.......2011 +3%
China 2010 +10.5%..2011 +9.6%
India 2010 +9.4%..2011 +8.4%
Russia 2010 +4.3%.2011 +4.1%
Brazil 2010 +7.1%...2011 +4.2%
UK 2010 +1.2%.......2011 +2.1%
Germany 2010 +1.4%2011 +1.6%
France 2010 +1.4%...2011 +1.6%
Greece 2010 <2%>.. 2011 <1%>
Spain 2010 <.4%>... 2011 +.6%
I am sure many of you are surprised @ these IMF projections.....as CNBC has been relentless in pushing "Double dip" & "recession"......so retail investors got scared & have been selling.
Even IF world economies slows down further......we will still be more than fine.....NO double dip !!!
Hopefully, markets will be UP enough to bring back investors confidence.......
Stay diversified & stay invested @ these lower levels.
BLOG does NOT give buy or sell.
Saleem
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