The bears sure have been on their trash talking game of late, pulling for a huge breakdown from here. The S&P 500 is still broadly making higher lows (and higher highs) since the June 4th bottom. Until that changes, I am reticent to look for short swing trades. However, cash is still the name of the game as both longs and shorts have been subjected to vicious whipsaws intraday and overnight for quite some time now. Case in point: Consider today’s 5-minute SPY chart below. Note how after the initial fade of the opening pop bears were pounding their chests about how bearish the tape was.
Instead of a further breakdown, though, the market sprinted back right to the opening highs. Once again, this action illustrates the mixed messages the market is sending us, despite blowhards on either side of the tape.
A major but unsexy part of trading is recognizing when you have very little business being involved with a given market, and then backing away considerably while still being a careful observer. It is not easy to sit in heavy cash, but it always looks easy in retrospect when accounts of overeager traders get chopped up in a correction.
Until proven otherwise, the market remains in a broad range of roughly 1335-1370 on the S&P.