The issue today is whether the plethora of bearish engulfing candles printed on the daily charts yesterday will confirm to the downside, presaging another leg lower in this correction. Thus far this morning, the bulls have proved inept once again in holding initial gains from the opening pop. However, until the bears can crack below 1300 on the S&P 500 again we are basically churning sideways with no real direction. Both bulls and bears with conviction are being put to the test here, with plenty of trading accounts getting chopped to pieces along the way. For that reason, I continue to point to heavy cash as a powerful portfolio position for avoiding this mess.
Underneath the surface, I do not see much momentum out there, though I am looking at some of the biotechnology stocks building daily chart bull flags, in PCYC and SGEN. Until most charts firm up, though, the idea is to avoid becoming another brick in the bases presumably being built during summer trading.
What, no intraday chart? 🙁
later on