In early March, I was on with Marc Haines and I stated that it was the time to get out of hiding and make a plan to get in long in the 660-690 zone in the S&P.
It was indeed the time for an oversold rally. Then a day later, we had the Haines Bottom. We call it the RedDog Reversal.
A week later, I went back on With Marc Haines after a 10% move up and said this rally will continue into the summer. It was fast and furious and investors feel like they missed something.
On April 30th, everyone was calling for a retracement. I was on With Bob Pisani and said that the market absorbed the big move in March and that it was time to look for momentum trades in certain names such as GS, JPM, MS, and Big Cap Tech. I also sent charts of the OIH and MOO for a potential breakout. I said a move above 875 in the S&P will trigger another move higher into the 900's and knock the short's teeth out. We are now 50 handles higher.
Here's a few things investors don't understand. The move that happened in February from 8,000 in the DOW to 6,400 should not have happened.
Market was pricing in the next Great depression,civil Unrest-there was talk of people taking money out of banks. People were even saying GE was heading for default. Obviously all these events did not happen.
We are in a rolling recession, a severe one. So the first 1500 points of this move- was so fast and furious because the down move was an over throw that should not have happened.
The first snap back was the market taking back the overthrow and the next leg was very methodical. There was a great rotation. Money went into technology and the banks, then rotated to the commodities, specifically oil, coal and base metal names.
The trade has changed from buying core longs when the market confirmed it's new rally on March 11th.
Now we are extended and it's very hard to enter new macro positions in this market as the S&P approaches it's 200 day moving average in the 945-955 area.
Traders have simple rules right now.
Don't Fight the tape, but don't chase it either
Buy the dip sell the rips is working.
Market is in a confirmed uptrend that you stay with until it changes, but you need to know points of interest that will pose problems for the markets and the stocks you're involved with.
Our Year End targets for the DOW stand near 9200-9500-and there is even a possibility of 9800-10,300
The S&P 975-1025 and perhaps a over throw to 1100
But entering the market after this move is very tricky and you need to have a plan if we break the uptrend and have a healthy retracement. Entries exits are still key.
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