WHY S&P 500 is staying above 50/200 DMA in Sep ???

IF you look @ S&P 500 chart since May of this year......you will observe that S&P 500 is staying above 50 & 200 DMA in the month of Sep 2010 with solid certainty & we are continuing this chart pattern in Oct also.....

SO..the logical question IS...why charts are becoming stable & strong......????

Charts are telling us that there is lot more conviction in this market from strong hands like institutions & hedge funds that is NOT obvious to many chartists.....

Many chartists are still fearful of this market & are pointing to imminent fall because of lower volume compared to previous rally in early part of the year....

When markets are "stable & pointing upwards" one should pay attention......

When markets do not fall on weak economic data..one should pay attention.......

Carter Worth famed chartist from Oppenheimer did not see S&P 500 going above 1140...facts are we touched 1157.16 well above Carter prediction.....also we are firmly above his target of 1140..we closed @ 1146.24 ????

SO..the question is...why these TV Gurus get it so wrong most of the time...talking of Gurus Doug Kass called the top @ 1130....????Doug Kass has a history of calling TOP which never materializes..his previous rant for TOP was @ 1000 in S&P....???

SO..if you are planning your trading/investing decision based on CNBC Gurus...you MAY be leaving lot of money on the table....

NOW..you may ask why we keep making "higher highs" ?????

Answer most of the time lies in sentiment of retail ...which has been pulling money out for straight 21 weeks..outflow in September alone was $12.2 billion..all data is from Trim Tab.....

Buying when Retail is fearful & selling has proven to be a very good strategy.....conversely selling when retail is euphoric is also a good strategy...works most of the time except in "bubble era"...

OK..so what do we expect going forward......????

Q4 is generally a positive Q..based on history where 5% gain is to be expected..beats money market by several %.....

I personally see us working towards 1200 to 1220 area by the end of Q4....

YES..there will be pullbacks of 3% along the way with minor resistance around 1170..BUT it will pay to be "in the market"

Many stocks are out-performing the market......

It will be wise to stay in stronger stocks than weaker ones....do not hunt for bargain..wait may be lot longer before you see decent return......

SO..stay in this market in a diversified format & IGNORE all the NOISE about S&P 500 going down to 1060 then 950 area.....

Good luck in your OWN due diligence.

Do NOT forget to book profit which is CRITICAL in this HFT trading environment.

BLOG does NOT give buy or sell.

Saleem