After 8 weeks of decline, can we get a rally going ?

@ the start of April, things were really looking bullish.

VIX was near lows & struggling in 15.

S&P 500 was @ 1415.32.......

BUT then started an 8 week of downtrend which took S&P 500 to 1291.98, this was a decline of 123.34 points or down 8.71% in a straight line......before this decline, we were getting used to max 2% pullbacks on an intraday basis.

Greece was the main reason for this slump, yes we were overbought, but that should have resulted in a max 5% decline.......

China & India also facing economic challenges, a slowdown which is affecting world economy. GDP growth rate in China & India has slowed down substantially. Both countries are trying to reflate their economy by many policy actions. Any new initiative to reflate takes time & results may not show up for another 90 days.

Bright spot is US, where housing is making a comeback. Manufacturing activity is healthy.

US Consumer confidence is @ 5 year high @ 79.3 .

Most traders & investors are under-exposed in stock market, due to fear generated by Greece & China.

I see tremendous buying power waiting on the sidelines.

Markets have corrected for 8 weeks & some key indicators like CMF & RSI are @ 5 months low.

S&P 500 was @ this level in Jan 2011, which is 17 months ago..also same level back in 1998-1999 run?

There is a very good chance that we may approach 1400 area....which is a potential gain of about 82 points or 6.22%......

TAPE has sharp UP & DOWN moves lately, we may get to 1400 in a hurry.

Many leading stocks have corrected sharply, they are the ones which may move UP the-most in a very short time.

We all have suffered in this sharp downturn, maybe it is time to benefit from our CONVICTION....

BIG moves in indices happens suddenly when we least expect.......

Most world markets including Canada, are open on Monday. This may give preview of coming week.

Good luck with your OWN due diligence & comfort level.

BLOG does NOT give buy or sell.

Saleem