Daytraders in a state of euphoria ?

Yahoo message boards are full of traders boasting stunning gains in every moving stocks......they are giving daily report cards of what they sold @ an incredible gains......not listing any bad moves ........this is a sign of euphoria which generally ends badly.

S&P 500 have moved UP 98.84 points or 6% from its low only seven trading days ago....it is extremely rapid move from historical point of view.......

VIX @ 13.04 is only few points above its 52 wk low of 11.05 reached on March 14, 2013.....

Put call ratio is low......

Bears are stuck @ 21.6%...not too far from its low of 19%+

All of the above should give a pause to traders who may be getting "too comfortable"

There is a very good chance that upward move may come to a halt........

Although we are in Q 4 which is extremely bullish ......we may have borrowed those gains already in October........

What could derail this "major uptrend"....

For once November may be negative this year & you can thank your politicians for destroying US economy when it was already slowing down......

Statistics for shutdown till Oct 17th may have inflicted heavy damage to US economy......this may affect guidance for Q 4 for many companies.....this time it is not an excuse but a reality faced by majority of US based companies.

RSI in S&P 500 sitting @ 65.89......i expect it to touch 72 area & reverse ......

It is important to be realistic going forward.......

November may not be kind to traders or investors......

Jobs report for September is expected to be 150,000 jobs growth, it may come close to that number.....

All in all, we had strong seven days during & after shutdown, it may be time to pause & some pullback may be in the cards......

BLOG does NOT give buy or sell.

Saleem