Series of new highs, now what?

SO...market celebrated Fed dovish stand on the direction of interest rates,lower the direction of rates, higher the direction of market.

We made series of new all time highs in DOW , S&P 500 and finally in Nasdaq...

Going forward, we have to recognize where the opportunities are, and where market is or maybe overbought.

Let us look @ RSI numbers to see where each sector of bull is sitting :

DOW         74.25

S&P 500   70.86

XLF          68.31

Nasdaq     67.83

SOX         64.53

XLE         62.87

GLD        62.61

TAN         59.01

RUT         57.57

I had to look @ most sector of this market to see where we are headed, It is very clear that DOW is overbought and RUT is lagging badly.

IF we play momentum plus rotation, we should see good returns.

Market is definitely getting close to overbought in a hurry but other sectors are not like Nasdaq & SOX which offers lot of ways to participate in their catch up rally..

Russell 2000 may represent biggest profit potential BUT sometimes laggards stay laggard for a long time and then turn south with overbought market.

XLNX AMD LRCX NVDA look undervalued relative to outperforming stocks.

Chinese stocks may be the-most attractive in terms of valuation, BUT it is the elephant in the room ( US China trade war is a major drag )

SO...hopefully...you have lot to think about in terms of how you will play this market rally which seems to be getting stronger by every close.

Good luck with your own strategy and comfort with this TAPE.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed