TAPE has been on a wild rise since 1st week of October 2019, in roughly 6 weeks most Indices have outperformed in the dreaded month of October.....
Many are interpreting this rise as unusual and rare.....not so.....
IF we go back to September 2018......Indices have barely moved....
YES....we are @ new all time highs in every major Index except IWM......
BUT gains in last 12 to 13 months is very muted.......
Here is what we gained since last September 2018:
DOW.........2.26%
Nasdaq....5.00%
S&P 500...6.11%
Extremely muted and normal run of the mill gains
History pegs 8.00% as average gains for market
That is not all.....IF we take famous all telling Financials....picture is really pathetic and it is :
Since January of 2018 XLF has gained only 1.46% in 23 months.........
What I am trying to highlight, do NOT be afraid of few days of new all time highs.....IWM is still hoping to do it in coming week..It is still 11.77 points away or .69%......
Once we have made series of new highs in IWM.....then we will be overbought.....NOT YET!
When we make new all time highs, Internals are much more robust than what we have observed this time....means too many skeptics and too many positioned the wrong way in this TAPE.
It is safe to conclude that many traders / Investors are not invested as much as they should.....underexposed @ new all time highs means.....much farther to go.....
And yes RSI is not in neverland either, they are :
DOW 75.70
S&P 500 74.11
Nasdaq 71.12
XLF 69.84
SOX 67.06
IWM 64.13
SO....IF there is an event driven pullback.....time to buy strength.....pullback may not last more than 1.5 days......
Good luck with your own analysis & comfort level.
BLOG does NOT give buy or sell.
Saleem
9 comments:
Hi Saleem,
Last week: +1.01% (YTD: +4.21%)
Notable Winners: BHVN PTON CHGG VICR LITE
Notable Losers: VYGR
Only VYGR (and early sells of PTON CHGG) dragged the portfolio performance down this week. I was surprised to see the Russell 2000 with a loss on the week--I'm not sure how that happened actually, but the index needs to get going during a usually seasonally strong time for this overall rally to continue. I'm finding more "trades" than investments right now as the year-end plays are shaping up nicely. I may have to dabble in some of these to utilize cash as my longer term picture remains uncertain through next year's election.
Holdings: AGCO PLAN ACMR LITE CSOD BHVN VYGR TRIL, cash 33.4%
Stocktrader
Hi Saleem,
Bought PTON @ 26.66
I'm going to try this one again with the huge short interest, better looking chart recently, and no lockup expiration until next year.
Stocktrader
Hi Saleem,
Bought DDOG @ 40.48
Amazing earnings + no lockup expiration until next year--might run into year's end.
Stocktrader
Hi Saleem,
Bought LYB @ 95.08 on upgrades and business momentum
Stoctrader
Hi Saleem,
Bought a little ENPH @ 19.72 with my remaining cash
High short interest plus recently announced deals and a bounce off the moving averages might propel a rise higher.
Stocktrader
Hi Stocktrader,
Good luck with PTON DDOG LYB ENPH.....
Last week UP .45%
YTD UP 63.42%
Sold SPWR $8.36...
Saleem
Hi Stocktrader,
Sold SQ @ $66.10
Saleem
Hi Saleem,
Good luck with the reduced positioning!
Trimmed ACMR @ 14.18 on relative weakness as a semi
Added to ENPH @ 18.67 on pullback into support with recent good news and high short interest
Stocktrader
Hi Stocktrader,
Good luck with more ENPH...
My confidence level is very low for near term gains.....
Saleem
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