S&P 500 UP 11% in 15 trading days, what next ?

S&P 500 has gone UP 199.03 points @ high of the day on Friday, that is UP 11% in last 15 trading days......

This is a very powerful run in almost straight line......

Many traders and mutual funds were not fully invested in this rally, this rally has caught many hedge funds by surprise, those High Frequency Traders were watching it all from sidelines.

Those who have been bearish were looking for next leg down before this rally started, reluctantly they have been predicting pullbacks @ every 40 points higher, they certainly believe in try, try until you fail badly.

Now 2025 area in S&P 500 has been anointed as the next major resistance......

I personally do not believe that is where resistance is, it is more like 2080 area for mini pullback and digestive phase.

This rally has shown not to bet against it, but old habit dies hard.

This rally has broadened into many sectors where quick money has been made.

Any pullback is a great opportunity to regroup sector wise, some sector have to rest and others are moving higher.

It is important to observe new sector which is showing relative strength.

Chinese are looking for 6.5% to 7% GDP growth for next 5 years, this is a healthy growth rate and many Chinese stocks should benefit from above GDP growth.

ECB decision making is on TAP for Thursday, should see some stimulative decision, that may propel this rally further.

Bottom line is, many catalyst from China to ECB are in play for this week, which could add up to buying frenzy.

Market is good and stay with full exposure until profit taking sets in, currently it is all about rotation in many sectors.

We did go down 13% in January, generally a reversal is 50% more powerful in initial stages, thus a 20% UP move cannot be ruled out.

Good luck with your home work and strategy.

BLOG does NOT give buy or sell.

Saleem