Sunday, June 1, 2014

New all time highs in Dow & S&P 500...now what ?

May is over & many bears are not sure what to do now?

Head & shoulder pattern thousands rely on are also not sure what to do now?

Outsmarting stock market has not worked for thousands either.....

Many gurus have slumped into history books of "has been"

BUT..what has survived the test of time is to go with the flow......

Going with flow has worked in bear market & in bull market......

Knowing the flow is the key in surviving market moods....

There are many interesting investing approach which also has survived test of time, most prominent is by famous Peter Lynch who was the best investor in modern history year after year, he did his homework, bought what he knew & understood & let it ride for years with stunning performance.

Talking of performance, everyone is nervous about this market because we have come too far too fast...so the theory of many pundits go who have been advising caution for days, weeks , months & years......

Reality is, that S&P 500 had a very poor sub par performance in the last 14 years & 2 months ......for 170 months S&P 500 has given an annual gain of 1.68%........we were @ 1552.87 on March 24th, 2000...since then we have gained only 370.70 points or 23.87% gain in over 14 years.......that involved Dot Com bust & financial meltdown.......

Once we know the real stat, then it is very easy to see how far we can go........

I can easily conclude that by end of 2016, we may be looking @ biggest market melt-up since nifty fifty were in vogue......as growth is restarting worldwide after major contraction.....by end of 2016 we may be looking @ S&P 500 @ 2500.....a 30% gain...which sure beats nicely the gain of last 14 years......

BUT...we all listen to CNBC which tells us what the next catalyst for correction is...coming week is ECB & Jobs report.......SO all smart traders will liquidate everything on Wednesday to be ahead of bad news from ECB.......that bad news may equal to potentially 150 Dow points....which is a major "game changer" to 2 second traders.......BUT..what IF ECB does what it said it will do......only Thursday will give us the answer by close.......

Also Jobs report which is expected to show growth of 225K.......may show 250K......then what...wait till Friday's close.......

Try to make your own decision based on sound investment / trading goals which does not changes with ECB, Jobs or CNBC noise........

Life is too short to be in the role of spectator on Wall & Broad......

BLOG does NOT give buy or sell.

Saleem

15 comments:

stocktrader_1996 said...

Hey Saleem,

There's a nice writeup in the Motley Fool about WDAY and other SaaS companies. It explains how their revenue streams work and why this makes them not as expensive as it seems. It is a good read:

http://www.fool.com/investing/general/2014/05/31/are-workday-shares-a-good-investment-for-the-long.aspx

Stocktrader

Stocks100 said...

Hi Stocktrader,

Thanks for your link. I will check it out.

Saleem

Stocks100 said...

Hi stocktrader,

Very interesting analysis on SaaS...i like their future projection....for WDAY.

Saleem

stocktrader_1996 said...

Hey Saleem,

I added to MS @ 30.799.

I really like the setup of the chart (having outperformed all other big financials) and I think these guys are perfectly positioned in places like wealth management, which is likely to increase in significance as this bull market trudges on.

Stocktrader

stocktrader_1996 said...

Hey Saleem,

I still have my eyes on AAL and GM, but looking for a pullback to enter, possibly after monthly metrics are reported. I'm not sure May was a great month for those industries.

Stocktrader

stocktrader_1996 said...

Hey Saleem,

Added to DHI @ 23.798.

It is acting well already this morning and I have confidence in a housing ramp this summer based on lower rates.

Stocktrader

Stocks100 said...

Hi Stocktrader,

Good luck with your conviction in DHI and MS..

Saleem

stocktrader_1996 said...

Hey Saleem,

Bought CSOD @ 39.63.

The chart is pulling back into the breakout level from last month and these guys are the only pure-play in their space. Besides some fringe competition from WDAY, they don't have any worthy opponents. I think they can continue to steadily grow as companies look to enhance the value of their employees.

Stocktrader

Stocks100 said...

Hi Stocktrader,

Good luck with CSOD.

Saleem

stocktrader_1996 said...

Hey Saleem,

The action in Z is pretty incredible. Two downgrades and it is barely down compared to some other internet names.

Stocktrader

Stocks100 said...

Hi Stocktrader,

YES...on a weak day...it is a sign of relative strength for Z.

Saleem

stocktrader_1996 said...

Hey Saleem,

Amazing correction of the ISM number. I've never seen anything like that, and wow does it put a totally different spin on the day. Talk about traders having to unwind day moves quickly...

Stocktrader

Stocks100 said...

Hi Stocktrader,

56 percent is way better than 53 percent growth....

Staying with big picture needs no reactive strategy...USA is in growth mode...

Saleem

stocktrader_1996 said...

Hey Saleem,

The change definitely makes my MS purchase look great. I really like it here based on the "new" news.

Stocktrader

Stocks100 said...

Hi Stocktrader,

Another revision by math challenged
Employees...ISM has a new number....

Saleem