World markets was given a stunning economic blow of trade war, no one expected that this will happen, thus a shocking response from stock market.
In any major selloff, indices have a tendency to touch 200 DMA, in extreme cases it goes below and then turn around.
S&P 500 is hair above 200 DMA and may dip below before turning UP.
DOW may do the same, all possible on Monday open.......
Nasdaq remained healthier, its half way between 50 DMA & 200 DMA.
Last week was the worst week in last 16 months, a record rarely attained in stock market.
Most stocks are either $20 down or are near 200 DMA....a rarity in most times, unless we are near a major bottom.
Friday had the feel of " too low too fast "
We are on the verge of making a " u turn " north.....
Except for few exception, same strong stocks will lead this rally...AMZN NVDA NFLX to name a few....
It will be a good idea to revisit your portfolio and see IF any swap makes sense.....
New funds allocation to equities near low is a winning strategy.
Initial target of indices should be towards 50 DMA......
For equities depending on which stock we are talking, talking 20 DMA, 50 DMA is a good focus.
Hoping, we have seen the low or pretty close to low.
Good luck with your own analysis and comfort level.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hi Saleem,
Last week:
Performance: -5.68% (YTD: +13.39%)
Notable Winners: YY MHO OPTN
Notable Losers: everything else
It really was a terrible week with almost nothing safe from the decline. I am honestly not sure whether this is the start of a significant technology unwind, similar to the negative sentiment we saw in early 2014 where many new tech stocks dropped 50%, or if this is the worst of it already. My gut tells me that we are in a more mature phase of these companies such that there will always be buyers stepping in to buy the technology of the future, but I am very aware that selling can beget selling for quite a while.
I've learned many times over that selling my favorite companies just because the rest of the market may fall further doesn't work for me. I often get too complicated with short-term strategies and gameplans and forget why I bought them in the first place. This time I'll be sticking with my stocks unless a thesis changes or a better idea presents itself.
Holdings (nothing over 10% weighting): MU EMN BAC SPLK GTLS MHO HAL OPTN BABA YY TWTR APPN TRIL, cash 0.0%
Stocktrader
Hi Stocktrader,
Weekly loss 9.31%
YTD loss 14.52%
Saleem
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