Saturday, February 25, 2012

What is "big picture" telling us?

Everybody on Wall Street is trying to time this market. This is a favourite pastime among traders to predict next correction.Many have taken a defensive position to WAIT for that "bargain prices".

Since 2008, predicting correction & shorting market actually worked for many. There were all kind of issues to deal with, sub-prime, recession & European debt to name a few.These issues took the entire world market down in a hurry from Jan 3rd price of 1456.80  to 666.79 in March 6,2009 in S&P 500. It took about 15 months for markets to find bottom & support. This crisis saw a plunge of 790.01 points or a plunge of 54.23%.......

Since then, world politicians, monetary authorities, have tried to deal with all of the economic issues.To the surprise of many eternal bears like Roubini, Prechter & Rosenberg, things are actually looking much better on all economic issues.

Markets looks ahead & tries to put some numbers, as we make progress in critical areas.

Based on the real progress in European debt & recession, market is trying to give a clear cue to many that things are better than popular conclusions.

So we have gained in all indices, S&P 500 is UP from 19th Dec 2011 low of 1202.37 to Friday's high of 1368.92. This is a gain of 166.55 points or 13.85%.

BUT we were @ 1260.87 on Dec 8th 2011, so the gain is only of 108.05 points or a gain of 8.57% in this great rally.

For those who have forgotten, on May 2nd, 2011 or 10 months ago, we were @ 1370.58 on an intraday basis.......so, all this hoopla on real economic progress, has taken us lower than 10 months ago still?

Remember..when we were talking about QE in US, in 8 months from Aug 27th 2010 to May 2nd 2011..S&P 500 went from 1039.70 to 1370.58..this was a gain of 330.88 points or a gain of 31.82%......

SO..do not under estimate the power of this rally, we have barely scratched the surface for a "real upturn" in economic activity worldwide & especially in #1 economy USA.....

By the way, S&P 500 high is 1552.87 which was on March 24th, 2000.......

Based on Friday's high, we still have another 187.13 points or further gain of 13.70%...just to breakeven after 12 years?

Some food for thought on this weekend !!!!

BLOG does NOT give buy or sell.

Saleem

6 comments:

c said...

SALEEM

I will get at that knowledge for ever!! Great overview

When you think about it your overview is spot on
I can to peel away all the CNBC Fast Money noise to understand your review--amazing that the pundits do NOT say any of analysis --terrible -- they wanna sell news not facts
Maybe my hunt for a 10% correction is wrong headed---dunno but caution is still appropriate--hence my 25 shares of APPLE ..

Sold KMP and Dupont for a very nice profit--I was up 12% so booking profits seemed appropriate!

I am looking at TAL --any thoughts on that one,,,,
Have a GREAT Sunday!!
C

Stocks100 said...

Hi C,

Thanks for your appreciative note.

CNBC pundits are trying to manipulate their audience to make money on their trade..they are looking for a "quick buck" & they are out......

CNBC serves their guest NOT their audience.......

They NEVER question their WRONG calls....Doug Kass has been wrong @ least 10 times since March 2009..but he is brought back for his agenda repeatedly......i dont understand WHY?

TAL chart looks very good......

Booking profit has nothing to do with market trend...idea is to make MONEY......

Saleem

c said...

SALEEM

Very interesting sell off
do ya think we get a 5% correction??

thanks

Stocks100 said...

Hi C,

Everybody is looking for 5% correction...that is why we wont get that wish fulfilled.

Watch how we close..it will surprise many???

Saleem

c said...

SALEEM

thank you!!!!!! Good call

I sold MWE, and ETP for a one bagger!

I wanted to raise cash and take profit

Bought TAL
Looking at AAPL below $500 and LINE perhaps if it drops more in price--dunno

Best to all
C

Stocks100 said...

Hi C,

Dont be too wishful in terms of buying @ low low prices...no such things are in the cards......

Saleem