Last 14 trading days has produced some of the fastest gains in the market.
Sellers dumped most of the stocks 14 trading days ago only to see most stocks recovering quickly, they were following the lead of Louise Yamada, Carter Worth and many nervous technicians who were looking @ 1600 as support in this mayhem......
But we went to 1871.91 and currently stand @ 2033.11...
Lesson learned by many famous technicians, do not believe your own theories too much because markets have their own mind...
S&P 500 has gone UP 8.61% in last 14 trading days.....
RSI sitting @ 61.41
VIX @ 15.05
Many traders have been buying VIX as protection from below 20 as 52 wk high is 53.29 & low is 10.88...
Many technicians try to interpret VIX for direction of TAPE.......
Like every other reliable indicator from famous oscillator of +10, everything is subject to market whims.....
Another widely followed number is bull to bear ratio which has trapped many in the wrong direction, currently bulls are in the lead by 5.3% over bears, a major reversal from bear leading for many weeks.....
SO..where do we go from here ?
That is the question many technicians are struggling with......
Every market has its own way of debunking many "so called reliable indicators" either by going lower than before or higher than before....thus a new 52 wk indicators are given birth......
Based on the current sentiment, which i try to interpret daily, is pointing to more gains, and many indicators like much followed VIX may go into new lows.......
China watchers are holding their breath for their GDP numbers, market is looking beyond those known weaknesses in China, so that may have an impact for full 30 minutes no more......
Many strong stocks are looking @ making new 52 wk highs, that is the only indicator one should worry about, as to how to participate in this melt UP.
Market internals of strong stocks were always telling a different story, not a single one made a new 52 wk lows while TAPE was in a freefall, BUT technicians ignored this tell tale of leaders strength.
The way i see it, any weakness is a "major buying opportunity" as we are headed higher.
Next target for indices is to take out 200 DMA which is only 27 points away for S&P 500, keep an eye on S&P 500 for direction of this TAPE........
YES..there may be couple of days of pullbacks, which is normal and healthy as we keep making higher highs.
Conviction and patience will pay off in a big way, in case you have missed the last 14 trading days of gains.
Good luck with your strategy !
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hi Saleem,
Finally an outperformance week! My portfolio gained 1.43% vs +0.90% for the S&P 500 and -0.26% for the Russell 2000. This puts me at -6.30% YTD vs -1.25% for the S&P 500, so I have a lot of work to do before the end of the year...
The big gainers were TWTR AMZN BABA SPLK at 4+% gain each, and all were new pickups this week except BABA. I sold CYBR and AMBA due to their poor performance, but picked up AMBA again later in the week due to my love affair with their growth markets and valuation.
Current portfolio: AMZN GM MS FDX BABA TWTR DHI SPLK AMBA LBIO
Cash: 1.9%
Although I am nervous about the big runup recently, the sellers do not have much strength and we have many days where the last hour really shows positive action. As long as that continues, I will remain at/near full exposure.
Stocktrader
Hi Stocktrader,
You did better than S&P 500 which shows good stock picks.
Saleem
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