The expected gap higher after the Spain bailout saw a classic “sell the news” reaction immediately at the opening bell this morning. Since then, we more than filled the gap, and are basically churning sideways until further notice. I am not seeing many energetic breakouts taking place, which leaves me sidelined in cash. At the same time, prematurely putting on bearish bets out of impatience during oversold bounces to try and time a rollover can be a costly mistake. Thus, I am going to continue to focus on patience.
We now have some obvious (perhaps too obvious?) levels to observe as resistance: 1335 on the S&P 500, and 2,882 on the Nasdaq. Until the bulls can breach and hold above those, you are looking at more grinding summer-style price action.
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Cash is good.
Indeud