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Thus far this morning, we are not seeing a “Turnaround Tuesday,” so much as a bunch of market players arguing against straw men. To be sure, it has been a huge move over the past week, since last Tuesday’s stunning late-day bullish reversal. We have climbed nearly 125 points on the S&P 500 in that time, and now a good chunk of traders are positioned to benefit from a fast and furious roll over.
Instead of sharply faltering, though, the market is hanging tough and digesting the recent strong move in a benign manner. Underneath the surface, many banks are following-through to the upside after yesterday 5% move higher on the XLF, ETF for financials. Individual standouts in other sectors include ANR and CTXS, as well.
I am resisting the urge to short at this point, and I am instead focusing on stocks that appear to be firming up from the bevy of loose and sloppy patterns that had forced me to stay in heavy cash for most of the summer and this early autumn.The bulls still have plenty of work to do if they are going to break us up and out of the multi-month range on the S&P 500, but the first task is to prevent a massive roll over after the recent rally. Looking at the 30-minute chart below, there is nothing that compels me to be short here. As you can see over the past week, we have a steady uptrend going on this timeframe. That can change quickly, but so far the bulls are doing their part. In fact, holding the line here would, indeed, render those who are aggressively short to be “straw-less.”
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