The biggest question in majority of traders mind is very simple....what to do next....
Market is definitely trying to deal with "vaccinomics " which is deciding daily trading direction.
There is good news and bad news depending on where you have placed investment dollars.
Many traders were used to " follow the winners strategy " which worked pretty good from March to August.....
BUT...there is a change taking place....
Some are finding it hard to notice it...
Most traders are viewing this pullback as an opportunity to buy stocks on the cheap....
Many are viewing this pullback as a change in focus of many traders.....
High Frequency traders are getting out of " high flying quadrupling stocks as yesterday's story "
Most indices and stocks came very close to 50 DMA, in a full bloodbath they tend to go to 200 DMA or even lower......
IF & when there is a shift in HFT preference, you do not want to overstay your welcome, it generally becomes very painful to see your gains evaporate on a daily basis.
The question may be, how do I spot a change in HFT preference as I do not belong to that community like most of us.....very simply....by monitoring very closely internals of market on a daily basis.
Here is the real pulse of any market RSI and it is :
CCL 67.26
JETS 63.06
DOW 54.24
S&P 500 53.38
Nasdaq 51.28
SOX 50.58
GLD 48.97
TAN 48.79
IWM 46.69
XLE 37.35
NOW interpreting these numbers is generally based on your " time horizon and investing format " some are long term investors who diligently buy every month, for them these numbers do not mean much.
Short term traders, daytraders, swing traders have lot to worry about changing trends in market place.
RSI is telling us clearly that Cruise lines & Airlines have seen lot of inflows while Nasdaq where brunt of selling was felt have seen lot of outflows......
Verdict of market is clear cut, out of Nasdaq and into cruise lines, airlines and casino operators to name a few sectors, others like Hotels & Restaurants also getting inflows.....
Every market is very difficult to read and my summation may be very simplistic, but it has worked for me when I monitor RSI daily.
Good luck with your own interpretation of this TAPE and your own comfort level.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hi Saleem,
Last week: +0.41% (YTD: +68.96%)
Notable Leaders: RUN ACMR VICR (all from Friday morning purchase), HCAT BHVN
Notable Laggards: CHGG AVLR MTCH SWKS
I came into the week with 20% cash, and sold off even more on Monday to get cash to 45%. Even though I missed a day's worth of good gains, this was one of my best moves in a while, avoiding some of the much larger losses later in the week. My gut feeling is that despite the pause in the Nasdaq run, there's not a huge incentive for longer term investors to sell at this point. The economy should continue to improve into 2021 and 2022, and capital gains would have to be paid if anything is sold now given the large run-up. Even the broader market could participate in the next stage of the rally here under the same premise, even with the presidential election looming. We have not seen this kind of money flow in many, many years. In summary, I'll continue to be opportunistic with buys/sells, but want to remain mostly invested here.
Holdings: AGCO HUBS PINS SQ VICR ACMR RUN HCAT AVLR PSNL SWKS EXAS ELF MTCH CHGG BHVN, cash 0.0%
Stocktrader
Hi Stocktrader,
Welcome back, hope you got your quarterly tan back.
Last week Down 1.27%
YTD UP 50.13%
Saleem
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