Markets in MAY 2011......

SO..here we are in famous MAY of 2011......

Markets as expected, had a fast correction of almost 3% in indices...

Correction happened in four trading days, which saw recent highs & then escalator down. On day five , we had a minor bounce of about less than half a percent.

Some traders are scared of this "weak bounce".......

It is "critical" that we analyze this market with all the cross-current, to get a realistic conclusion.

SO...what happened this week ?

- Silver crashed

- Oil crashed

- Gold got beaten down

- US$ turned UP

- Equities tumbled in a hurry to the tune of  3% in 4 trading days...

When was the last time we saw all that in 4 trading days ?

I do not recall EVER..in my long focus of all markets.....

Plus today, Greece was back in focus to "stall our rally"

SO... all of the above created a "monster of MARGIN CALLS to many High Frequency Traders "

SO..today we are all sifting through the after affects of this "margin Hurricane" worth many BILLIONS.......

BUT...despite all of the above, you  will agree with me that 3% correction in equity markets was pretty TAME.....

HFT had to liquidate all the HIGH BETA stocks which had been running strong, to meet their margin calls for Oil & Silver......

This should explain my steadfast OPTIMISM for equity market.....

In any PANIC selling, you must evaluate the reasoning. This alerts you to some "unbelievable opportunities"

RSI in all indices did not pierce 50...which is the best RSI picture i have seen in any fast correction....

As of tonight, RSI are as follows :

S&P 500 53.12

Nasdaq 55.77

Dow 58.36

Based on "May syndrome" & earnings coming to an end...we may be looking @ RSI range for Indices & Stocks from 50 to 70 range ...back & forth.......

It will be PRUDENT to shift trading ideas to different sectors based on RSI......

I personally monitor RSI closely for Stocks & Indices, which have always guided me more accurately , for my market projection.......

It is more important to watch RSI for stocks than markets.....most of the time RSI in stocks "turn UP first" than Indices....

SO.....YES , we are in MAY......BUT you can still make money by knowing your stocks FA/TA well....

Who said making money in Wall Street is easy......

It is all about KNOWING your stocks trading range.....which keeps CHANGING.....

Good luck with your OWN comfort level with MAY, BUT some stocks will reach highs in month of MAY.......that is a REALITY !!!!!!

BLOG does NOT give buy or sell.

Saleem