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Thursday
Mar182010

Grind me higher...

Lately, it feels like this market is outperforming everyone.   Why do we say that?   It's those stocks that weigh so much on the index and have hardly done anything in the past are starting to slowly grinding higher, just as are lagging stocks in lagging sectors, you’d never look at it.   Nothing wrong with this catch up picture though!   We knew that eventually the optimism will spread from the high beta stocks to others.    It was just a matter of time and adds to the performance anxiety theme.  What's surprising though that it's happening around the middle of the month , a lot sooner than we expected for Q end window dressing.  

*On the hand today, high beta names from AMZN to GOOG to BIDU rested, some commodity linked stocks (steels/metals) had big reversals,  momo China stocks were hit all day (is policy tightening around the bend?), all this hints at resistance being hit today around 1165.

Well,  we still haven't got out of March yet and market is locking SPX 1200 in its sight and that may happen a lot sooner than everyone realizes.    Of course, any number on SPX is nothing but a number until people start to make a case out of it.    We know a lot of analysts have set SPX 1200 as a target for this year and we wonder what'd happen once we've reach it.    Trading in today's environment is a little bit tricky even though media has painted a very rosy picture of the market lately.

If we didn’t know any better, we could've just bought every stock out there and add more everyday.   The stocks that are hitting new 52 week high is simply unreal.    So, there's abundance of plays out there seemingly worthy to chase as there is not much resistance after 1165 and 1177.     Question here, shall we chase blindly now and hope for the market gets to 1200 soon or shall we wait for some better prices?    As it stands,  this super sized market is fat and could use a diet pill and that's what's keeping us from chasing it higher.    Lets just give it a couple more days as the odds of reaching 1200 any time soon is not very high, but realize it's being eyed now as a target.