Option Expiry this week MAY put downward pressure....

Indices have come up nicely & are @ its highest level since rallying from 1040 area.....so far we are UP 127 S&P 500 points or 12.2% in a span of less than six weeks......

Option expiry may put downward pressure this week or may force indices in a sideways move....market needs a rest this week before resuming its uptrend.....

Technically internals of the market are in "overbought" area......86% of stocks are above 50 DMA which HAS triggered correction in recent past....

71% of stocks are above 200 DMA.....in recent past 90% has triggered a correction in recent past......

Mutual fund investors are only 30% bullish vs 37% in May of 08...means this sentiment is "too bearish" which is extremely bullish...

Individual investors are bullish now but are NOT @ its extreme level before correction....

Market has been UP 5 out of last 6 weeks......

SO..what does it all adds up to......

That markets are near overbought level in the short term......RSI of 66.08 in S&P 500 is approaching 69 area where we have pulled back to 51 area.....

For long term investors ..these indicators means nothing..BUT for swing traders buying @ lower level means better chance of profitability........

Over the weekend Finance ministers of G20 could not agree on currency issues..which is also a negative for Monday......

For traders especially daytraders..it may be a very challenging week.....Option expiry troubles the best of traders.....as MM can & do play serious price manipulation......

My strategy is to lie low for this week & WAIT for next week......

I have LVS,ARUN & MAY exit those two position also.....

It will be a very good idea to monitor strong stocks for buying next week.....

This week earning report MAY NOT provide the "juice" for UP momentum in the market.....

BUT next week AAPL ER on Monday MAY spark buying frenzy.......

It is a good idea to know the price swing of each stock you have and may be profitable to play that swing...sometimes $2 swing CAN add up to serious money....I have narrowed my trading to few stocks like LVS,AAPL,BIDU,AMZN...which has displayed "predictable pattern"

We cannot be master of all BUT can be of few stocks...reading & monitoring few TAPE is extremely critical in this market.....

On a more bullish note...DOW has a "bullish crossover" which is 50 DMA higher than 200 DMA...which bodes well for the future of this market......

BLOG does NOT give buy or sell.

Saleem