8 week rally in market...where next?

It has been 8 weeks since we started to rally in early October, It is important to factor this in your near term trading / Investing decision.

Nobody can predict how long this rally can go on, BUT being aware of this stretch is critical.

We can slump for 2 days very easily....

We can also do a slow grind to higher highs...this is a more probable scenario.....

When we slowly go up with few pauses, that is where rotation come in handy.

I definitely see rotation and base building for stronger stocks...

Also advisable to stay in the market with some powder dry.

Here is a look @ my favorite and reliable indicator RSI..and they are :

Nasdaq          70.20

S&P 500        69.34

DOW             66.02

IWM              65.95

SOX               55.31

Nasdaq & S&P 500 are overbought, not deeply though.

Russell 2000 & SOX are relative bargain, SOX @ very attractive entry point after seeing selling.

As we can see that some sector of this TAPE are overbought and some are bargain, that is when rotation is a very good strategy....

SO stick to tried and true RSI indicator and position accordingly......

Do not overstay your welcome in stocks which has made you good money, book your profit and move on to next great idea of yours.

Good luck with your own strategy and comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed