Here is a little chart-art of the SPX daily. Maybe it is, maybe it isn’t. Either way, the noose is again tightening around the necks of traders and investors are just too scared to do much of anything.
Haven’t you heard? There is a renewed 1979-style malaise, so drop your socks and sell your stocks…
Just kidding…
The bottom line for the markets is that we continue to bounce around, seemingly flailing in each direction without any real resolution. But I believe we are doing exactly what we should be doing from a technical perspective and I expect the flailing to continue. We may breakout or down marginally several times through the course of the year and that will serve to swing the market indices from support to resistance. It will continue to be very tough to choose market direction for longer than a week and perhaps it is finally time for real stock picking instead of concentrating on market proxies. Maybe I’m being anachronistic but there is always a backlash when things get too extreme and the market’s reliance on near-term direction and computerized trading could be ready for a change.
Comments »On June 8th the SPX made a perfect double bottom to the panic lows set in May. BTW–we alerted you to that as it happened, both here and on Twitter. We also mentioned that the two month old correction is probably over.
Now we are here, just a few short weeks later, with the SPX 80 points higher, and China is trying to re-ignite the risk trade again. They alone could get us to test our recent highs, but we will remains stuck in a trading range that will exhibit a certain characteristic.
The trading range will be SPX 1000 to 1200. But it will proceed to tighten up for weeks within the “inner portion” of the range and then kind of explode outwards to its fringes. This will serve to once again put the noose around most near-term trader-types necks. Then, when you least expect it, volatility will explode again–but stay within the overall confines of the range.
We may be starting Phase II of the credit crisis as Soros says and we maybe entering the next phase of the housing meltdown according to MW. But the market has had its histrionics and will get tougher from here. The bottom line is that you shall not get “too bearish or bullish”. Not yet, anyway.
Comments »I enjoy lottery tickets as much as the next guy and every once in a while I indulge. Here is one we scratched to reveal a nice payday…BTW–we paid 2.25 and it fell to 2.10 before making its move…
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