TAPE has perplexed many seasoned traders, indices are not following old traditional technical definition of "overbought "......
Old traditional definition of overbought is RSI @ 60......
Currently RSI in S&P 500 is 83.42.......
Lat time RSI dipped below 60 was in second week of November 2017.....
SO...for last 9 weeks we have gone UP in RSI......
Strength in RSI is a sign of money flowing in market @ above average level.....
Currently, based on old interpretation, retail investors are " most exposed in this TAPE "
MAYBE.....just maybe, retail investors are getting in this market after being away from this market for last 17 years......
There is too much demand for stocks from retail, institutions and many portfolio managers who are " most cautious "
I do not see any sign which tells me that we are going to make
a " u turn " in this market.
We MAYBE @ the start of biggest inflow in stock market, retail investors are @ the highest level of exposure.....
IMAGINE...IF...institutions start allocating " trillions " into equities......
I do think we are witnessing inflow based on "lowest interest rate environment "
Money is finding stocks to be cheapest in terms of PE values...compared to other times of euphoria..
1999 / 2000 PE was "non existent " in most stocks.....
Established companies like CSCO were trading @ triple of current multiple........and still going higher....
SO..based on " new Tax treaty " profitability of most corporation in US is looking much brighter than before.....
In any "bullish " environment, worst mistake IS when one tries to guess where the TOP is ......
In conclusion, stay with this market in a diversified portfolio for a long time, we may have just started on another run in this bullish TAPE.....
Good luck with your own thesis and your own comfort level.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hi Stocktrader,
Added 70% MARA @ $3.75.....
Saleem
Hi Saleem,
Bought RCL @ 127.95
Increased consumer spending around the world should drive cruise stocks which have been forming a nice base for months.
Good luck with more MARA!
Stocktrader
Hi Stocktrader,
Good luck with Royal Caribbean....
Saleem
Hi Saleem,
Last week:
Performance: +2.93% (YTD: +7.99%)
Notable Winners: OPTN HCLP GPK LITE
Notable Losers: MU
It was another surprisingly nice week to really start the year strong. A 10-yr yield scare early in the week fizzled which led to another leg higher. There's been enough gains in 2 trading weeks to cover the whole year--this makes me both nervous and encouraged at the same time. I continue to pursue the fundamental and valuation story behind each stock so that I am not caught up in a mania. So far the diversified allocation is providing good balance. I continue to hold some cash in search of opportunities created as earnings season starts.
Holdings: BAC EMN RCL MU HCLP ACIA OPTN LITE GM GPK TRIL, cash 22.5%
Stocktrader
Hi Stocktrader,
Last week for me was down .47%.....
YTD UP 13.78%.....
Saleem
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