Impact of China raising interest rate by .25% ????

Saturday, China announced .25% increase in interest rates.

It was the most discussed interest rate increase in the last one month,some were speculating to be .50% & to be done earlier.So,we have less than anticipated rate of increase & came few weeks later.

Impact of .25% may last for first 15 minutes of trading ,then back to usual trading pattern.

Option players are most optimistic & @ extremely bullish level since Jan 2009,normally this means a pullback.....

VIX has been lowest @15.23 in the last 12 months,but we were lower to 10 area before that.Normally low VIX means a pullback.

Now for the good news,We are about to enter a 3rd year of a presidential term which has been consistent in last 60 years of producing a positive return for the year.Highest return was +17.7%.

So,if we add all the positive & potential short term negative...we MAY have a slight negative going into this full 5 days of trading.

BUT.....2011 will bring major re-allocation into stocks,which should propel S&P 500 into major gains...1380 area is considered attainable in next 12 months.

Our technical guru Carter Worth thinks we peak out @ 1270 area ????

In Conclusion,this week MAY give you another chance to reallocate funds into better stocks.Any weakness on an intraday basis is a buying opportunity.

2011 is going to be a stock pickers market AGAIN,so do your OWN due diligence by studying fundamentals & charts of each stocks you own or want to own.

Good luck in 2011 !!!!

BLOG does NOT give buy or sell.

Saleem