Indices were in a corrective mode for last 5 weeks, many issues impacted trading, first Yen surge, then oil climb, then oil pullback, then Fed interest hike fears......all that resulted in following :
S&P 500 lost from high to low 4.03%
Dow Jones lost from high to low 4.60%
Nasdaq lost from high to low 5.85%
Russell lost from high to low 6.06%
These are meaningful pullbacks and based on 5 week duration, it was the longest stretch of digestive phase.
Inflation worry, growth worry are the key catalyst for uncertainty......
World is adjusting to slow growth and minor uptick in inflation based on prices and wages.
In Asia, inflation is moderating in India & Pakistan, much lower than record inflation of several years or even decade.
TAPE has discounted current burning issue of Fed interest rate hike in June.
Expect a buy in anticipation and then further buy on the news.
Any jittery selling should be a strong buy
RSI in indices in mid 40's are in the lower end of the range, which should give comfort to traders and investors.
Oil & Gold has stabilised which confirms slight inflation and growth worldwide.
Expect major new inflow in the market....
Many doomsters will change their tune once we start moving higher and make new highs.
Exposure should be near high based on your own comfort level.
Good luck with your own analysis.
BLOG does NOT give buy or sell.
Saleem
10 comments:
Hi Saleem,
Thanks to a huge last week (+5.1%), I was finally able to overtake the S&P's gain for the year despite being down as much as 23% YTD during some of the darkest times in February. SPLK (+13.4%), WLH (+7.6%), NXPI (+6.4%), and FIT (+6.0%) were all nice gainers last week, and importantly, are across different sectors. I hope this trend continues!
Portfolio: JKS HD DAL BAC GM SPLK NXPI WLH FIT HUN
Stocktrader
Hi Saleem,
I apparently missed my OLED chance by waiting on Friday. A Goldman Sachs upgrade today has the stock flying...
Stocktrader
Hi Saleem,
I am looking closely at SCHW here. They will benefit tremendously from an interest rate hiking cycle, additionally benefit from the new fiduciary rule, and have been a rumored takeover in the past. I think it lines up well for gains.
Stocktrader
Hi Stocktrader,
Excellent performance by your portfolio.
Sold LULU @ $63.50.
Saleem
Hi Saleem,
Sold FIT @ 14.53 to buy SCHW @ 29.31
The sentiment on FIT may have taken another hit with their heartbeat monitoring reported problems, and really they have a lot to prove still. I'll be watching for a re-entry because I think the stock could be a major mover at some point.
I like SCHW here for the reasons I listed above, but the main risk is that economic data weakens such that the Fed puts the brakes on raising rates. I think the other two catalysts still could come through for SCHW though.
Stocktrader
Hi Saleem,
LULU is really a hard stock for me to gauge. You did great selling on a nice pop in recent days!
Stocktrader
Hi Stocktrader,
Bought ABX @ $17.85.
Saleem
Hi Stocktrader,
Good luck with SCHW.
Saleem
Hi Saleem,
Good luck with ABX. I have no idea the next direction of gold, so I have stayed away, especially after the huge runs.
Stocktrader
Hi Stocktrader,
I have no idea about Gold price either, just playing the trading range.....
Saleem
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