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This morning’s opening gap higher is holding much better than yesterday’s, as the major indices are up well over 1%. In the short-term, this type of market is ideal for very quick traders who like to take on lots of overnight risk. For swing traders looking to ride the meat of a trend, though, this is still a market that requires patience. Despite the big moves that we have seen over the past week, if you look at the daily chart of the S&P 500 below you can see that we are basically flopping around in a consolidation pattern. That could easily be a bear flag, but the pattern is just as likely to morph into a longer base, which would be more neutral in nature.
If the bulls can break and hold above 1390, the picture becomes more interesting on the long side. For now, though, it is important to not get swept up in the emotion of either a big up or big down day.
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Thanks.
LMAO at the bread.
One thing that struck me is how fast sentiment has deteriorated – look at the Bespoke survey from this weekend; bears jumped to 57%. I’d give the bulls the benefit of the doubt for the next few weeks. But that may not override the obvious risks.
good pt