This week is the last week of summer holidays, slowest volume will make another volatile week before Labor day
Next week is also a short week where vacation may be extended.....
I am not expecting much movement from where we begin in the next two weeks.
Technicians will get a chance to prove their point that market is primed for a down move.....
I do expect test & retest of key levels like 50 DMA....
Technicians are troubled by weakness in Home builders which has been the case since second week of May..technicians are ignoring the fact that S&P 500 has made new 52 wk highs since May.....
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Sector rotation "is a fact of life" on Wall Street every year.....
YES...new strong sectors have emerged which technicians have failed to acknowledge......
Currently TAPE has only one worry......when is Fed going to start tapering......slight movement in September in that front is to be expected.......
Fed tapering will be monitored in the market place with reaction in stock market.......
IF tapering is minor then market will move beyond this issue......
As we all know from the benefit of hindsight that Wall Street always worries about many issues......
Strong TAPE fight "wall of worries"
Bull Bear ratio is reflecting fear in the market, Bears are @ the highest level in a long time @ 42.9%, bulls are @ lowest level in months @ 29%......these extremely bearish reading generally leads to a strong TAPE...
GDP is expected to be 2.2% growth in Q2...IF we meet or miss this number is good news for bulls...IF we exceed this number then expect a quick negative reaction......so be ready for Thursday @ 830 AM.......
S&P 500 may mark time to deal with low volume but exaggerated moves cannot be ruled out......
My suggestion is to increase exposure in Gold, Silver, Copper, Steels, Oil & anything material......
Life is never comfortable on Wall Street but it is our job to capitalize in new opportunity.
Good luck with new ideas !!!!!
BLOG does NOT give buy or sell.
Saleem
10 comments:
Hey Saleem,
I think the taper itself is overplayed as the expected $10-$15B change in asset purchases per month isn't a surprise to anyone anymore. More key to me is whether the economy has lost momentum in key areas like housing, aerospace, and autos and also disappointing consumer sentiment and spending. Although this weakness may be transitory, I think it still can/is catching investors offguard. We saw the first major evidence of it in the July new home sales and August Michigan consumer sentiment survey (8/16). It will be interesting to see how the economic data plays out from here.
Given the overly bearish sentiment and end of the month window dressing, we could see a good week. It may be an opportunistic time to reduce exposure ahead of September.
Stocktrader
Hi Stocktrader,
You are more optimistic for this week, I am @ best "neutral".....
Low volume in next 9 trading days may not take us far from where we are...
There is trading fatigue..thus super low low volume.
Saleem
Hey Saleem,
Sold CLF @ 22.92 to take profits.
Stocktrader
Hi Stocktrader,
Good move in booking profit....
Saleem
Hey Saleem,
Sold TCK @ 26.20 to reduce long exposure.
Stocktrader
Hi Stocktrader,
Comfort level is a big factor in trading......
Saleem
Hey Saleem,
Sold Z @ 86.55. With all these sales, I should definitely sell some TZA also, but the data today has me concerned about the state of the US economy.
In general, I'm just trying to get smaller here and wait things out.
Stocktrader
Hi Stocktrader,
Your take on economy & stock market is deciding your moves......
Being small is OK......
Saleem
Hey Saleem,
Sold KALU @ 70.025. Aluminum is lagging the other metals in the rebound.
I wish I still held the GLD, but I'm too nervous to pick some up at these prices, although I still think things point up, and possibly extremely so.
You can see the "month-end" effect in names like TSLA, FB, SSYS, LNKD, and NFLX today.
Stocktrader
Hi Stocktrader,
Many of the high fliers are UP 300% in last 12 months like LNKD, TSLA, NFLX......sure some fund managers would like to show them for September portfolio......
GLD should perform till end of October based on seasonality....
Saleem
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