US stock market rally continues.....

 Every so often, stock market goes in a direction which surprises all players, short and long term.

With COVID-19 raging on all over the world again, with another shutdown in many parts of USA and around the world....

World economy struggling to get going due to Corona Virus repeat disruptions, you would expect world stock market to hit new lows IF not all time lows.....

BUT BUT NOW VACCINES are ready to rollout starting in few days......

SO surprisingly US & World stock markets are staging the-biggest bull run which we have seen since 1999.....

Some are equating to US rally in 1987......which I remember very well....because it crashed later in October...

Based on current environment where US election is finally put to bed with all the " theatrics played out with knockout in courts 0/34 "

COVID-19 probably has seen the peak or close to it....

Stock market is looking ahead six months to " happy days "

That means no shutdown, no disruptions....

Disney parks around the world will be packed....

Airlines may do " overbooking again "

Cruise lines sailing " loveboats "

Hotels packed..

Oil hitting $60 per barrel.....

Yes it is June 2021 probable scenario.....

Then the stock market is justified in making series of more new all time highs

BUT....make sure your weighting reflecting new reality of major bull moves in deeply discounted " economy to open stocks "

Rotation may happen on a daily basis, but UP moves may be exaggerated in travel / recreation stocks.

NOW back to RSI....

IF we are in a super bull market then overbought moves UP to 80 RSI not 70 and may push UP to 90 area before it tries to digest its gains for few days......

Please try to understand that RSI numbers reflects " current trading environment " old 70 / 30 may not be in play....

Currently highest RSI is in Russel 2000 / IWM / small caps @ 73.77 followed by Solar stocks TAN @ 73.56....that may be an entry point....

My favorite and heavily weighted XLE / energy stocks are lowly 68.33 BUT it has moved UP 50% in November alone thus a very strong buy...

But IF you want to play " DOG of RSI " it is Gold GLD sitting @ 28.62......need I say any more...

SO in conclusion, these are interesting times as to which sector is " running away NOW "....do not look too much in "rear view".....

Good luck with your own conclusions but please adjust your weighting and exposure.

BLOG does NOT give buy or sell.

Saleem