Market is headed higher

This is my ahead of the curve analysis.

We are at an early stage of an up move. The first stage was marked by sector rotation out of commodities and energy sector in to sectors like Retail/consumer, financial and technology. Some stocks have moved too far to fast. The market will have a correction, it will scare most bulls and embolden many bears.

Once the correction is over the market will resume its up leg. This correction will create good set ups for entries in to number of stocks. The correction will create bull flags and cup with handles. There are also lots of double bottoms and triple bottoms kind of setups forming.

New set of stocks and sectors are already in the process of assuming leadership. Sectors like brokers, restaurants, retail,software/technology have had broad based break outs. So these sectors will have further set of rallies. Market is anticipating good earnings from these sectors. If a market is about to break down, these sectors
will not be rallying.

Post earnings there will be lot of good breakouts. Many of the stocks are setting up for post earnings breakout.The best performing stock during this phase will be again the good earnings/sales play. There will be more sectors breaking out. Once momentum gets going, it takes many months for it to reverse.

The market is a discounting mechanism. It has fully discounted the possible bearish scenarios and probably sees no risk of immediate breakdown or plunge. The rally which started in 2002 may have some more legs. The markets may top with a bang.

Every pullback is a buy opportunity. I am keeping my list of top 25 opportunities ready. Three cheers for the resilient American economy.

Do not trade based on this scenario. This is all part of the Fed/ Bush/Cheney/Rove/ Republican/Democrats/Martian/ left wing/right wing/billionaires/ Goldman Sachs/Gold haters/credit card companies conspiracy!!!!! Sales of Head and Shoulder are set to rise as bearish analyst are left scratching their head.

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