Much dreaded May has arrived, many were position for indices to go down down & down......
Robert Prechter, Doug Kass, Brian Kelly had their "bear suit" on for weeks & months but each month they were dressed down by the velocity of this TAPE.
Bears worst nightmare is yet to come when May continues to roll in the wrong direction which is UP for those who focus on individual stocks not on markets or gurus who do not know which end is UP.....
SO...how does current TAPE looks from technical point of view.......
IF we look @ key widely followed indicators, we can see that there is more bad news for bears, here is the indicators & its possible direction :
RSI @ 64.15 in S&P 500...it could easily go towards 75 area
VIX @ 12.85.....it could easily go towards 11.05 area
S&P 500 could head towards 1680 area
One thing many needs to learn from this market is to never try to overthink & do not bet against an uptrending market.
Many traders think they can predict this market better & have bet against the trend...result is never good.
Any time "in doubt" adjust your exposure & book profit........IS a much safer strategy as advocated repeatedly by me.
I have never advocated shorting this market in this strong bull run, many have been run over by the velocity of this TAPE after a brief pause.
SO....investors can stay the course for ever......this is a long term bull market which can easily go on for a decade.....which takes us into 2019.....
For traders....technicals are the key in terms of exposure, booking profit & buying strategy. Selling / reducing near 70 RSI area is a long tested strategy, buying / increasing near 50 RSI is a good number in a strong bull market.
Laggards are looking extremely attractive now which includes Tech, Gold, Silver,Steel,Iron ore,Copper,Met coal to name a few.
It is important to be diversified in many sectors.....
Her is my sector weighting :
Technology EBAY & BBRY 56.21%
Oil & Gas KOG 22.70%
Gold & Silver AUY 21.09%
Exposure 100%
Good luck with your own strategy, it is never too late to change the course.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hey Saleem,
I am struggling with a FCX decision here. I like the valuation and think global economies are bottomed, but I also like a strong dollar and wonder how that will impact the underlying commodities. I'm inclined to take a shot on the stock again, but I also hate to waste my last buying power (although I'm considering taking profits on RDN).
Any thoughts?
Stocktrader
Hey Saleem,
Just putting all the argument down in a post helped me make the decision. I bought FCX @ 31.31. The more I thought about it, I realized that downside from here was really limited based on improving economies and the dividend. I've found in picking stocks that "limited downside" is nearly as important as potential positive catalysts. Also, if necessary, I can still sell RDN, MRIN, or SWC to purchase a new idea.
Stocktrader
Hi Stocktrader,
When we write things down & read it for review...the flash bulb goes ON...
Always follow your own take of stocks potential.
It is extremely important to have gold / copper in portfolio...they have been down down down.....
Good luck with FCX.....
Saleem
Hey Saleem,
Sold RDN @ 12.56 on this pop off the MBI/BAC settlement. I know settlements have been expected for a while, so I think it might be running out of catalysts and has had a huge run.
Stocktrader
Hi Stocktrader,
Excellent trade in RDN.....
Saleem
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