Afraid of this market ????

We have just witnessed 2 days of correction in last few days & everyone is afraid & fears the worst???

IF we take any index,we are down 3.34% in Nasdaq.....

Dow is Down 2.7% & S&P 500 also 2.7%....all these stat is factoring absolute high & low of the day in all indices......

None of the index closed @ low of the day ???

Volume was @ best average in this selling ????

Most traders/investors were used to index going UP everyday since August lows.....nothing goes UP forever & a PAUSE is technically healthy......

Those who follow history, will recall that back in Oct 2007 S&P 500 was @ 1549.38.....then we were greeted by financial meltdown & we went to 666 in a hurry.We lost 883 points or 57%......since March of 2009 we have worked our way to recouping most of that loss in 20 months..so last 36 months we have actually lost 322 points or 20.78%........

SO..the question is .....what is causing all this recovery in financial markets??

Answer lies in worldwide economic recovery which IS gathering steam......

China,Asian,South American economies are in overdrive.....

Europe & US is in slow recovery mode......

Bottom line is ,that there was a reason that we went DOWN & there IS a reason that we are going UP.....Computers & HFT follow the trend very well.....

SO...try to understand the "mechanics" of wall street rationale......

In my opinion,this is a "strong bull market" which is there to take advantage of......

YES..there will be corrections along the way of 5% average,but none of us are smart enough to time these corrections & get back in......

Currently markets are looking attractive based on RSI as listed below :

Dow 53.15

Nasdaq 55.90

S&P 500 56.13

These are definitely better than 80 we were touching few days back??

Can we go lower..sure....

BUT not all stocks go lower with markets......

SO,instead of worrying about depth of correction..try to buy good stocks @ deflated prices......

I am expecting markets to make new highs in next 12 months......

Good luck with your OWN strategy !!!!!

BLOG does NOT give buy or sell.

Saleem