<<Arik -- In my two cents worth opinion market here is in no win situation, if the Fed
does nothing until 30th June new stories every day on strength of economy will
impact the market, if it raises the rates we may see that after some test of supports
we may see a clear divergence, internets and Techs may take off whereas cyclicals
and SPM goes thru a test of 1292 area..>>
Now we are in a situation where a bias to raise is established, now markets have not so far totally built in this bias, for that bias to be priced the banks and cyclicals have to loose and BKX ideally would need to test this 850 area, I would expect that while these tests underway we may see a rebound from the lows as some benign numbers dampen inflationary fears..
It will be quite an interesting market, a yo yo as we move to test lows in some sectors and make new runs in SOX and Techs even I would assume some of the internets like SCH AOL EBAY ATHM EGRP will benefit from this market, AMAT earnings will certainly help this sector and you would find some good interest in semis we have seen this 392 support solidly tested in last few days I would think that old high of 428 would soon be visited, DOW cyclicals will reamin under pressure, Comp may have the ability to test the old highs alongwith NDX.. I am right now underweight in Oils, BKX, even DTX for some time, cyclicals, but I would maintain positions in sectors highlighted above, on SPM I will trade solidly betwen supports like 1318 and 1310 and 1292, we will see rebounds and breaks of these supports, it will be a daily thing, on top I have reiterated that unless 1364 is out we will see a possiblity of buying some puts at 1364.. On Bonds we have seen a good cushion for change in bias now the next move to 6plus yield will only come on a stronger data, one can be long bonds instead of long DOW and distribute more in Techs instead of exposure in interest sensitive stocks. I expect lot of volatility and good opportunites to make money as I always emphasise you will see your level.. |
