Strength in rotation......

This TAPE is definitely a strong bull, it goes through rotation very efficiently.

First tech was rage, then biotech, then financials and now some technology are back in vogue.

This type of rotation is very healthy in a strong bull market.

Even in major indices, there is rotation, first, it was Nasdaq, then S&P 500 and now Dow is in the lead.

It is not a matter of leaving one sector for the other, but having a very diversified portfolio is the answer.

As each sector takes its turn, your portfolio will be in an ascending pattern in terms of higher and higher overall gains.

You can almost predict rotation for next 3 to 5 trading days, IF you look @ RSI, they are listed below for your evaluation :

DOW         77.01

S&P 500    72.86

Nasdaq       64.89

RUT           57.48

GS              69.48

BAC           65.20

MS             63.98

GOOG       67.59

FB              55.27

SOX           46.69

IF we look @ these broad sectors / indices / stocks, it is very clear, where there is relative value.

Dow is the most overvalued right now and Nasdaq offers relative value.

It is important not to ignore strength or to rush for bargain, this TAPE has rewarded strength and ignored bargain.

This TAPE requires in-depth knowledge of technicals as it is taking place now, old values of 60 overbought has been replaced with almost 80 as overbought.

AS we have barely 9 days of trading left in this calendar year and only 7 trading days to close the books, it is imperative that we learn from this new trend.

Take a good look @ your portfolio, it may require some adjustment or taking a non-trader view towards stocks.

Thing's are changing in a big way!

Good luck with your own analysis & comfort level.

BLOG does NOT give buy or sell.

Saleem