Intraday Look and Analysis

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On the 15-minute chart of the SPY above, you can see that we just saw some quick selling come into the market this afternoon after coasting along for most of the day. However, we are still well above the huge gap down we saw on Monday morning, and beyond that we are also above Monday afternoon’s lows.

It is very easy to look at a daily or weekly chart and identify a trend. Sticking with it, though, is a different story. On a daily basis, your local Twitter stream features countless traders either calling a major top or running for the hills on the slightest bit of selling. As I mentioned over the weekend, the adage that “everyone makes money is a bull market” is patently absurd. Indeed, patience is a trait that is important to exude in trending markets.

Currently, the S&P 500 is flirting with holding above the obvious 1370 level, and the Russell 2000 has been having trouble getting above 830. It should not come as a surprise that these obvious levels are serving as areas for some churn. What is important to note, though, is that we have not been violently rejected from them. Instead, we are simply pausing in a rather benign manner. Often times, it is not what the market does, but how it does it.

The bears have been unable to really sink their claws into this market for virtually all of 2012. Eventually, their day will come. Until we see more evidence of that starting to happen, though, I am sticking with the prevailing trend.