Markets made a major move when majority were on the sideline.....NICE !!!!

SO, here we are sitting @ 1339.67 in S&P 500.

 Majority of investors / traders were scared into selling near lows as CNBC gurus made a list of 10 things to resolve before we could move UP.That laundry list has only ONE resolution & we ran UP five days in a row.

The trouble with CNBC gurus are, that they have no real accomplishment as a trader or advisor. @ best they post mediocre result based on published data, but due to power of their CNBC shows they can impart terrible advice with impunity.

The purpose of this intro is, try to understand markets on your own due diligence. Know your stocks well, even when they are going down due to market condition.

Always be in the market even when there is tremendous gloom. You  may have to cut exposure but be in the best stocks based on your own due diligence.

Markets had the-best weekly gain since March 2009.....

VIX got clobbered 24.8%, fastest drop since Aug 2007......

UP volume led by 11.19 to 1 in NYSE & 8.59 to 1 in Nasdaq on Friday

We had new 52 wk highs @ 169 in NYSE & 143 in Nasdaq

Investors participation in equity are @ the lowest in 9 months......

Fixed Income exposure @ highest level in 25 months......

S&P 500 RSI is @ 63.76...

S&P 500 gained 6.10% from recent lows......

SO..what all these stat means for investors & traders.....

It means, that this market rallied in a hurry with many investors in safety mode. Hedge funds were also making their move mid way through this rally, so hedge funds are also under-invested.

All this means that there is more firepower left in this rally, there is a very good chance that we may make new 52 wk highs.

NOW..the question is, do we pause for few days with some pullback or jump towards old high of 1370.58 then pull back......

IF i have to guess, i say we move towards 1370 area, even make a nominal high then pull back.

Lot of technicians are fixated in VIX , which is @ level where markets have pulled back before & they are predicting same starting Tuesday...but I disagree.We may make a new lower level in VIX before we pull back.

I will not be surprised IF we move further UP to make new intraday highs.

RSI should go to 70 area.......

As there is tremendous "catching up" to take place, we are looking good.

Markets is also looking to Q2 earnings report, which is another catalyst.

BUT a slight pullback  is not such a bad idea.

There are many sectors which has not participated in this rally like gold, silver, oil,ag,solar to name few.

It may be prudent to position in lagging stocks with good earning potential. Again, not all stocks in a sector are the same.

Markets are looking healthy based on technicals & seasonality.

Try to have a well diversified portfolio in many sectors.

It is OK to book profit also & rotate money.

Good luck with your own due diligence.

BLOG does NOT give buy or sell.

PS....World markets are open on Monday inculding Toronto. I will give a recap around 9 PM.

Saleem