US stock market has roared very quickly to overbought level....
IF we pause & digest gains here...It may be healthy...
IT IS extremely difficult to predict when market will stop going UP...
We can only rely on some overbought & oversold perimeters
RSI is the only one I use extensively in my buy & sell decisions...
Sentiment is another indicator which I use to deal with EUPHORIA or EXTREME NEGATIVITY
Currently everyone is very comfortable with market direction.....
BUT....
It Is NEVER a straight line UP or DOWN...lot of swings along the way....
Currently RSI stands @....
XLF 70.82
SOX 70.71
Nasdaq 68.69
DOW 68.32
RUSSELL 2000 60.33
Based on the above RSI numbers......most are in " overbought territory "
Russell 2000 which has been the weakest link, is also showing 60.33 RSI....NOT a bargain @ all.
Stocks in a bull market is hard to trade, sometimes low 60 is a great entry point BUT ....nothing IS GUARENTEED in Wall Street.....
Keep your list to buy stocks handy, It IS becoming a traders market.....even a day traders dream.....
SO please notice the changing trading environment.....each stocks are going through digestive period thus creating opportunity of buying lower....
Good luck with your own analysis & comfort level.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hi Saleem,
Last week: +6.97% (YTD: +72.17%)
Portfolio Leaders: IONQ TYGO CVNA HIMS PLAY
Portfolio Laggards: ZENV
It was a stellar week for the portfolio as further evidence of a peak in rates took firm hold and money flowed into beaten down and debt-laden sectors. I believe this particular aspect of the rally has further room to run, even as the major indices may only grind higher from here. In that light, I have sold some big caps in favor of smaller ideas and hope the year-end positioning is appropriate.
Holdings: TNA(x2) PLAY LYFT CVNA AGCO HIMS IONQ PSNL(0.75x) TYGO(0.6x) ZENV(0.45x), cash 0%
I am interested in adding ENPH and possibly ELF if I can find some room. It is tempting to sell AGCO for some of this purpose, but I didn't want to unbalance the portfolio so much towards one direction of leveraged/beaten-down stocks.
Stocktrader
Hi Stocktrader,
Last week UP 4.75%
YTD UP 106.26%
Saleem
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