The continued theme in the market over the past few months has been that of “five steps forward, four steps back, five steps back, four steps forward,” and so forth. Trying to time each short-term top and bottom has been just as dicey and aggressively positioning for directional moves, given the slipper nature of perceived breakouts and breakdowns alike.

The S&P 500 is currently attempting to put in another higher low since the June 4th bottom, barely hanging above the July 12th print of 1325. While the daily charts offer bulls hope of progress, the weekly timeframes remain shaky and compel me to continue to buttress my portfolio with a heavy cash position. The volatility of earnings season, as we see with AAPL‘s negative reaction and the cotniuneud laughter in NFLX, adds to the notion of erring on the side of caution. That does not necessarily mean that a major breakdown is imminent, but rather is implies moving to the sidelines and letting a better situation present itself first.

Finally, on the issue of Fed rumors and late-day spikes, I believe the more important issue is whether the market can hold the line at the July 12th lows, coinciding with a smoothing out 50 day moving average. In addition, sentiment has become very negative, but that is often not enough alone to justify the contrarian case.