After a solidly green morning, the market has flip-flopped and turned lower. Given the short-term extended conditions of the senior indices, this should not come as a huge surprise. To be sure, a few days of broad market consolidation is probably a session or two overdue. With that said, I remain steadfast in my belief that an increased attention to individual stock selection is valued now more than ever.
After the steep run that we have seen over the past week, I will be watching closely to see how this afternoon plays out. If we close at or near the lows of the session on the S&P 500, then we would have a fairly cautious setup going forward over the next few days. However, it is crucial to understand the context in which this may happen. We recently broke out from a key area of resistance, and some short-term consolidation would still be very bullish provided that our primary breakout area of 1330-1344 holds as firm support.
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Today I went back and looked to see what the $SPX did after we captured Saddam. That seemed to be the closest case to today’s events. First day the market was open it had a run up, reversal and closed in the red near the LOD. The second day it closed just over the close from the day before Sadaam was captured.
Then the S&P proceeded to go on an 80 pt run. Straight up, no pullbacks.
Interesting. I could see that here too, actually.
Think we hold 1350-1355 then continue to march higher into June.
tend to agree